NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

(Parenthesis ( ) Indicate Revenue Decreases)

Duplicates/Conflicts with/Companion to/Relates to HB2, SB2

SOURCES OF INFORMATION

Department of Health, Health Policy Commission

SUMMARY

Synopsis of Bill

Senate Bill 24 appropriates 25 million from the general fund to the Department of Health for expenditure in FY 99 and FY 2000 for the purpose of providing services to clients eligible under the Developmental Disabilities and Disabled and Elderly Home and Community Based Medicaid Waiver Programs. The bill contains an emergency clause.

Significant Issues

Senate Bill 24 has a number of significant issues that impinge upon the Department of Health as well as the Human Services Department. They are as follows:

•     The 25 million general fund appropriation would become a recurring expense. However, those monies would generate 67.5 million in recurring federal medicaid dollars for a total impact of 92.5 million dollars.



•     Senate Bill 24 requires the Department of Health to serve all New Mexicans eligible for the DD and D&E waiver programs. However, there is no definitive estimate as to the exact number of individuals who would be eligible and consequently, no estimate if the 25 million dollar appropriation is sufficient to meet the need. For example, the Department of Health has publically stated there are about 1700 developmentally disabled clients who have expressed a desire to receive services through the DD waiver and likewise, 2500 individuals who have expressed a desire to receive services under the D&E waiver. None of these individuals have been assessed for eligibility under the waiver regulations and consequently, there is no knowledge of the correct number of eligible individuals.

•     The Department of Health makes a hypothetical case by assuming that all individuals on the registry are determined to be eligible. If that is the case, then the 25 million in general fund would be sufficient to serve only 2,548 individuals when the hypothetical need is determined to be 4,202. Thus the appropriation falls short of the need.



•     Currently, the DD waiver program serves 1820 individuals and the maximum waiver capacity authorized by the Health Care Financing Administration is 2900 through the year 2000. The state will need to request an amendment to the waiver capacity but there is a time delay of approximately 6 to 9 months. The Disabled and Elderly waiver has more capacity for new individuals, but a similar expansion request will be necessary sometime in the future.

TECHNICAL ISSUES

As mentioned above, the sheer size of this appropriation will cause significant time delays in the approval processes for waiver expansion as well as delays in service delivery simply because the number of providers of services, especially in the rural areas , is bot sufficient to meet the increased need. In addition, additional state staff will be necessary simply to process the increased paperwork and administrative burden.

OTHER SUBSTANTIVE ISSUES

See above

POSSIBLE QUESTIONS

1. How was the 25 million dollar amount estimated? Was any determination made of the health care resources available to meet this increased demand?

MB/njw