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.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

Taxation and Revenue Department (TRD)

SUMMARY

Synopsis of Bill

This bill would establish the Health Care Investment Credit Act to be administered by the Taxation and Revenue Department (TRD). The bill provides for a gross receipts credit for qualified healthcare providers providing services to qualified individuals.

Qualified individuals are those individuals receiving medically necessary services who are at or below two hundred thirty-five percent of the poverty level as determined by the U.S. department of health, or who are covered by medicaid.

The value of services is determined to be either:

• The equivalent medicare reimbursement rate as determined by Title 18 of the Social Security Act, less the amount actually charged to the qualifying individual; or



• One hundred thirty percent of the equivalent reimbursement rate for medicaid, less the amount actually charged to the qualifying individual.

The amount of the credit permitted will be twenty percent of the value of services as determined above.

FISCAL IMPLICATIONS

The Taxation and Revenue Department (TRD) estimates that this bill would have a negative impact on the general fund of $7 million (recurring).

The potential for larger impacts exists as a larger percentage of New Mexicans (relative to other states) are well below the poverty level set by the U.S. department of health.

ADMINISTRATIVE IMPLICATIONS

The Taxation and Revenue Department (TRD) does not believe they currently have the expertise to oversee this Act. The audit costs at TRD are potentially high.

OTHER SUBSTANTIVE ISSUES

This bill is not about Medicare or Medicaid. This bill would benefit qualified medical practitioners who provide services to the poor. Doctors do provide services and charge poor individuals in need of care knowing that the patient has little or no ability to pay. The balance not paid by the patient, Medicare, or Medicaid, becomes the doctor's burden.

The Hippocratic oath says that a doctor cannot refuse service to someone in emergency need, regardless of their ability to pay. Most doctors would also not refuse service for medically necessary conditions. Medically necessary conditions includes emergency and non-emergency conditions. An example of a non-emergency condition would be a hernia, or a fractured bone.

This legislation would help alleviate the costs associated with following the Hippocratic oath.

JBE/gm