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.

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

SPONSOR Senate

ORIGINAL DATE

LAST UPDATED

02/12/08

HB

SHORT TITLE Health Care Authority Act

SB

CS/225/aSFL#1

/aSFL#2

ANALYST Weber

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY08

FY09

FY10 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

See Narrative

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

SUMMARY

Synopsis of SFl#1 Amendment

Senate Floor Amendment 1 deletes Section 6 and renumbers the subsequent sections.

Synopsis of SFl#2 Amendment

On page 11, between lines 19 and 20, insert the following new paragraph:

(10) the development of provider networks that always allow the consumer a choice of health car

providers;"

Synopsis of Substitute Bill

The Senate Floor Substitute for Senate Bill 225 has nine sections.

Section 1 is the Short Title: Health Care and Policy Commission Act.

Section 2 states the definitions of important terms used in the act.

Section 3

The "health care and policy commission" is created and is an adjunct agency.

An adjunct agency is defined in statute as:

CS/Senate Bill 225/aSFL#1/aSFL#2– Page

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•

"Adjunct agencies" are those agencies, boards, commissions, offices or other

instrumentalities of the executive branch, not assigned to the elected constitutional

officers, which are excluded from any direct or administrative attachment to a

department, which retain policymaking and administrative autonomy separate from any

other instrumentality of state government.

The board shall consist of eleven members, at least one of whom shall be a Native American,

one of whom shall be a physician licensed pursuant to the Medical Practice Act and one of

whom shall be a nurse having a graduate-level education in nursing, selected as follows: two

members from each of the five public regulation commission districts: five appointed by the

governor and subject to senate confirmation; and five appointed by the New Mexico legislative

council with at least two appointments being made by council members from the minority party;

and the superintendent of insurance.

Each appointed board member shall have at least three years' experience in at least one of the

following areas; provided, however, that all areas are represented on the board:

(1)

executive-level experience in management or finance in a business not related to health

care;

(2)

experience in the field of health or human services consumer advocacy;

(3)

executive-level experience in a business not related to health care that employs ten or

fewer individuals;

(4)

executive-level experience in a business not related to health care that employs eleven or

more individuals;

(5)

experience in health care management or finance;

(6)

experience related to health policy;

(7)

experience in health care economics;

(8)

experience in labor organization and advocacy; and

(9)

experience in public health.

The board is subject to the State Per Diem and Mileage Act as well as the Government

Disclosure Act and the Financial Disclosure Act.

Section 3 also outlines other general procedural matters common to any board.

Section 4 outlines the Commission powers and duties.

The board is charged with:

(1)

identifying procedures to carry out the duties identified in Subsections B and C of this

section;

(2)

creating ad hoc advisory councils; and

(3)

requesting assistance from other boards, commissions, departments, agencies and

organizations necessary to provide appropriate expertise to accomplish the commission's

duties.

The board is to create at minimum the following advisory councils:

(1)

a finance council to study existing and prospective public and private health care system

financing and cost-containment initiatives for a sustainable universal health care system;

(2)

a federal impact council to:

(3)

a Native American health council;

(4)

a health disparities council consisting of representatives from underserved populations

CS/Senate Bill 225/aSFL#1/aSFL#2– Page

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who have expertise in the causes and elimination of health disparities to make

recommendations, including but not limited to, recommendations on the following issues:

(5)

a delivery system council to: and

(6)

a council of state-funded or state-created health care or health coverage agencies or other

entities to examine cost containment and benefit issues and make policy

recommendations related to those issues.

By January 1, 2009, the commission shall develop a comprehensive plan for accessible and

affordable health care for all people living in New Mexico.

The board shall appoint an executive director of the commission with at least five years'

experience in health care policy, management, delivery, financing or coverage. The board shall

develop a process for evaluating the executive director's performance. The executive director

shall carry on the day-to-day operations of the commission. The executive director shall be

exempt from the provisions of the Personnel Act.

Section 5 outlines the commission staff.

The executive director of the commission:

(1) shall employ and fix the compensation of those persons necessary to discharge the duties of

the commission, including regular, full-time employees;

(2) shall propose an annual budget for the commission;

(3) shall report to the board no less than once monthly from July 1, 2008 until July 1, 2009 and

no less than once quarterly after July 1, 2009;

(4) may contract with persons for professional services that require specialized knowledge or

expertise or that are for short-term projects; and

(5) may organize the staff into operational units as the executive director sees fit in order to

facilitate the commission's work.

The commission's staff is subject to the provisions of the Personnel Act.

Section 6 discusses the reporting and use of data.

Health insurers and providers are to report about health coverage, services delivered, incident

and infection rates and outcomes achieved in a format required or approved by the commission.

Data should be reported in aggregate form and electronically to the extent possible. The

commission is not to release any individual-identifying or corporate proprietary information

except as provided by state or federal law or by court order. The commission may use data

collected by provider associations or other entities and shall not request data already collected by

and available from other state agencies.

Section 7 terminates the agency.

The commission is terminated July 1, 2013 but will continue to operate according to the

provisions of the Health Care and Policy Commission Act until July 1, 2014. Effective July 1,

2014, the Health Care and Policy Commission Act is repealed.

Section 8 is a temporary provision transferring The Health Policy Commission under the

authority of the Health Care and policy Commission effective July 1, 2008.

CS/Senate Bill 225/aSFL#1/aSFL#2– Page

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Section 9 repeals Section 9-7-11.2 NMSA 1978 that creates the health policy Commission,

effective July 1, 2008.

FISCAL IMPLICATIONS

There are no direct fiscal implications but it must be assumed the new commission will operate

under the existing Health Policy Commission budget. Additional operating expenses must be

assumed since there is a new Executive Director and per diem and mileage expenses related to

the board members. The exact amount is not determined but the costs could be substantial with

contractual services needed to evaluate programs beyond the expertise of the existing Health

Policy Commission.

SIGNIFICANT ISSUES

The Health Policy Commission offers the following regarding experiences of other states with

Health Care Authorities.

Source for state information below is Universal Health Coverage Research on States and

Unresolved Issues

completed by the Health Policy Commission in August 2007.

Maine

The Dirigo Health Plan created the Maine Healthcare Authority to oversee and administer the

Plan, which will be funded by streamlining and simplifying the many ways Maine residents

currently pay for healthcare. The Maine Health Care Reform Commission (MHCRC)

recommended that the Authority board be comprised of healthcare providers, government

appointees, hospital administrators and representatives of the business community as well as

private citizens. The Authority will oversee the healthcare program as well as steward the

education of healthcare professionals.

Massachusetts

The Massachusetts Commonwealth Health Insurance Connector Authority is run by an

independent agency with a 10- member board. The Connector will make health insurance

portable by allowing employees to keep the same plan even if they leave an employer. The

Connector will also allow employees to aggregate the contributions of multiple employers, e.g. if

they are part-time workers or work for multiple employers, and apply them to one insurance

plan. The Connector is designed as a clearinghouse for insurance plans and payments. It

performs the following functions- it runs the Commonwealth Care program for low-income

residents (below 300% of the poverty level) who do not qualify for MassHealth; it offers for

purchase health insurance plans for individuals who are not working, are employed by a small

business (less than 50 employees) that uses the Connector to offer health insurance. are not

qualified under their large employer plan, are self-employed, part-time workers, or work for

multiple employers, it sets premium subsidy levels for Commonwealth Care, and it defines

"affordability" for purposes of the individual mandate.

Vermont

The administrative centerpiece of the law is the Vermont Health Care Authority (VHCA), which

began its work in August 1992. The VHCA acts under the direction of a three-member

administratively powerful board appointed by the governor and confirmed by the Senate. The

board’s responsibilities include program design (typically requiring legislative approval), data

CS/Senate Bill 225/aSFL#1/aSFL#2– Page

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collection, advisory work with other agencies involved in implementing reform, and working

with existing public organizations to encourage local and regional health plans and primary

health care systems and to negotiate with provider groups. The board represents one of the

nation’s most highly centralized and potentially powerful health care agencies.

Colorado

The Blue Ribbon Commission for Health Care Reform is studying health care reform models to

expand health care coverage, especially for the underinsured and uninsured, and to decrease

health care costs for Colorado residents. The Commission is charged with examining health

coverage and reform models designed to ensure access to affordable coverage for all Colorado

residents; soliciting comprehensive reform proposals from interested parties; selecting between

three and five proposals for in-depth technical assessment by an independent contractor; and

completing a final report with recommendations to the General Assembly by January 31, 2008.

Maryland

There is a State Board of Governors within the Maryland Universal Health Care Plan. The Board

is to administer, implement and monitor the operation of the plan; establish a global budget for

the total amount that may be expended for the provision of health care under the plan each year;

develop and recommend to the governor and the general assembly funding sources for the plan;

set reimbursement rates for non-hospital outpatient services which are not regulated by the

Health Services Cost Review Commission; administer the Maryland Universal Health Care Trust

Fund; establish reasonable and effective means of cost containment, quality assurance and

promotion of access to services; establish a system to promote continuity of care, including the

use of case managers for plan members with multiple health care problems; establish a

prescription drug formulary; and administer payments for the provision of covered services to

participating health care providers.

Minnesota

The Minnesota Universal Health Board is legislatively proposed for the purpose of providing a

single, publicly financed, statewide program to provide comprehensive coverage for all

necessary health care services for residents of Minnesota. The board may implement and

administer the Minnesota universal health program; estimate the current cost of universal

coverage for all Minnesotan residents; establish statewide and regional budgets; approve budgets

for each region, establish fee schedules, which may vary to reflect regional differences; approve

budgets for institutional providers; approve capital expenditures for freestanding outpatient

facilities; monitor compliance with all budgets and fee schedules and take action to achieve

compliance to the extent authorized by law; issue requests for proposals for a contract to process

claims submitted by individual providers; provide technical assistance to the regional boards;

administer the Minnesota Health Care Trust Fund; monitor the operation of the Minnesota

universal health program through consumer surveys and regular data collection and evaluation

activities, including evaluations of the adequacy and quality of services furnished under the

program, the need for changes in the benefit package, the cost of each type of service, and the

effectiveness of cost containment measures under the program.

Oregon

The Oregon Health Fund program would be established under proposed legislation. The goals of

the program would be to provide coverage of the defined set of essential health services for all

residents; reduce unsustainable health care cost increases in Oregon; shift to a system of public

and private health care partnerships that integrate public involvement and oversight, consumer

CS/Senate Bill 225/aSFL#1/aSFL#2– Page

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choice and competition within the private market; use proven models of health care benefits,

service delivery and payments that control costs and over-utilization, with emphasis on

preventive care and chronic disease management within a primary care environment; provide

services for humane and dignified end-of-life care; restructure the health care system so that

payments for services are fair and proportionate among various populations and health care

programs; and fund a high quality and transparent health care delivery system that allows users

and purchasers to know what they are receiving for their money. The Boards will

also manage the Oregon Health Fund; oversee the actuarial process to define the set of essential

health conditions; conduct public hearings to determine the adequacy of the defined set of

essential health conditions and report the findings to the Governor and the Legislative Assembly;

and contract with privately and publicly sponsored health care organizations.

Washington State

The Washington State Health Care Authority would work with contracting health carriers and

health care providers, and a nonproprietary public interest research group and/or university-based

research group, to implement practical and usable models to demonstrate shared decision making

in everyday clinical practice. The demonstrations would be conducted at one or more multi-

specialty group practice sites providing state purchased health care in the state of Washington,

and may include other practice sites providing state purchased health care. The Health Care

Authority and the Department of Social and Health Services shall also develop a five-year plan

to change reimbursement within state purchased health care programs to reward quality health

outcomes rather than simply paying for the receipt of particular services or procedures; pay for

care that reflects patient preference and is of proven value; require the use of evidence-based

standards of care where available; tie provider rate increases to measurable improvements in

access to quality care; direct enrollees to quality care systems; better support primary care and

provide a medical home to all enrollees; and pay for e-mail consultations, telemedicine, and tele-

health where doing so reduces the overall cost of care.

MW/bb