0403 - Div of Human Services General Administration Fund / 8722 - Cons Federal Funds Div Human Services Gen Admn Fd

Sources of Revenue:

General Fund,Other Fund Federal

Legislation creates:

Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The purpose of this bill is to require the Department of Health and Human Resources to annually review and adjust rates it pays to care providers to be comparable, on a percentage basis, to rates paid to hospitals. Although the cost impact is estimated to be considerable, it is not possible to calculate a definitive cost impact based on the information provided (see "Memorandum" section below).

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0

Explanation of above estimates (including long-range effect):



    "The legislation makes this requirement applicable to “care providers”; however it does not define what that term means or the specific provider groups intended to be impacted. The Department makes payments to various types of providers which provide services that may not be comparable to hospital services. Hospital cost and reimbursement rates are not an appropriate basis for determining rate adjustments for other providers. Additionally, hospitals are not all paid at the same rate. There are different classifications for hospitals and for specific services provided in hospitals. Rates for a variety of provider types are adjusted on various timetables using a variety of methods, such as cost (based on an annual or semi-annual cost report) or annual indexes and weighting.
    All reimbursement methodologies are prescribed in the State Plan or defined in an approved Waiver. Funding for Medicaid services is a joint partnership between the Federal government and the state, therefore requiring all reimbursement methodologies to be approved by the Centers for Medicare and Medicaid Services (CMS). Failure to secure CMS approval related to the methodology in HB 2292 would result in loss of Federal matching funds. Federal regulation requires that certain payment methodologies be utilized in determining provider reimbursement. For example the Benefits Improvement and Protection Act of 2000 requires states to develop a prospective payment system for establishing Federally Qualified Health Centers (FQHC) rates. Therefore the methodology prescribed in the Bill is in direct conflict with Federally prescribed rate methodologies.
    While it is estimated that the impact to make this adjustment would be considerable, it is not possible to estimate at this time with the information available."

    Person submitting Fiscal Note: Michael J. Lewis, MD, PhD, Cabinet Secretary
    Email Address: