8722 - Cons Federal Funds Div Human Services Gen Admn Fund; 0403 - Division of Human Services Gen Admin Fund

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 create a Medicaid vendor transportation program that exempts Department of Health and Human Resources motor vehicles used solely to transport Medicaid clients from the jurisdiction of the Public Service Commission. The bill provides that those vehicles are subject to the commission's safety and insurance rules. The program requires written agreements with contracted transportation vendors. The bill also requires the Secretary of the Department of Health and Human Resources to report the effectiveness of the program to the Legislative Oversight Commission on Health and Human Resources Accountability after one year.
    The Department estimates the proposed legislation would result in a cost savings of $5,000,000 per year ($3,556,500 Federal and $1,443,500 State). See memorandum section.

Fiscal Note Detail

Effect of Proposal Fiscal Year
Fiscal Year
(Upon Full
1. Estmated Total Cost 0 0 -5,000,000
Personal Services 0 0 0
Current Expenses 0 0 -5,000,000
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 anticipated cost savings are based on a survey conducted by the Bureau for Children and Familes in 2009 of states who utilized broker services. Based on their contacts with representatives of the following states, they were provided the following information:
    • Georgia - In the first year NEMT costs were cut 41% from $84 Million dollars to $55 million dollars.
    • Connecticut- Social Services saved $4 million dollars.
    • Missouri -In the first year of engaging in a brokerage contract the state of Missouri saved $10 million dollars.
    • Mississippi - Saved between -$3 and $4 million dollars within one year of implementing NEMT with a full – time broker.
    West Virginia was determined to be most like Mississippi and Connecticut; the $5,000,000 was based on those states' savings experience after implementing broker services.
    It is estimated it would take approximately 1 year to complete the bid process to obtain a brokerage vendor and begin to realize savings; as such savings in SFY14 (if any accomplished during that time) would be limited and the $5,000,000 is anticipated to be for a full year of implementation.


    The proposed legislation is the first step needed for the Department to move forward in procuring transportation brokerage services to ensure more efficient provision of non-emergency transportation services. Experience demonstrated in other states was effective control of program costs and the ability to address fraud and abuse that is prevalent in the current system. It also provides a coordinated delivery system and a more effective use of Department resources. This places responsibility for all aspects of the program on the broker, inlcuding prior authorization of services, assessing transportation needs and assigning the most appropriate means of transportation, and contracting with providers and negotiating rates.
    There is concern regarding meeting the one-year reporting requirement; time will be needed for the State Plan change and issuance of a RFP before implementation of the broker services. Therefore, it may be more than one year before savings can be calculated.

    Person submitting Fiscal Note: Rocco S. Fucillo
    Email Address: