FISCAL NOTE

Date Requested: January 14, 2016
Time Requested: 01:06 PM
Agency: Health and Human Resources, Department of
CBD Number: Version: Bill Number: Resolution Number:
1830 Introduced SB6
CBD Subject: Human Services


FUND(S):

0403 General Administrative Fund/ 8816 TANF Block Grant / 8722 Consolidated Federal 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 require drug screening and testing of applicants for the Temporary Assistance to Needy Families Program for whom there is a reasonable suspicion of substance abuse.
    The bill creates a pilot program requiring applicants to pass an initial drug test to become eligible for benefits; requiring participation in a substance abuse treatment program, counseling and job skills program with an adverse drug test; precluding assistance for refusal to take a drug test; establishment of administrative review of decisions to deny benefits; providing mechanism for dependent children to receive benefits if a parent is deemed ineligible; setting forth prohibition from benefits for an adverse drug test. The bill requires federal approval of the program, and ensures confidentiality of records.
    In preparing the fiscal note the Department assumed the State has fiscal responsibility of testing TANF applicants/recipients. Total estimated cost for the first year of this program would be $50,172 and subsequent years would be $22,172. The first time cost recognizes system upgrades and cost of testing with out years covering only testing. Pursuant to subsection (k)(3), there is no estimate of any costs for applicants participating in treatment programs, as they are responsible for those costs.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2016
Increase/Decrease
(use"-")
2017
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 50,172 22,172
Personal Services 0 0 0
Current Expenses 0 50,172 22,172
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):


    Total estimated cost for the first year is $50,172 with subsequent years being $22,172. First year costs include minimal system upgrades to perform a pilot, including but not limited to applying system work arounds. Estimated costs related to system upgrades/changes to the Department's RAPIDS System (eligibility system) to accommodate requirements of the proposed legislation are $28,000. This estimate (280 hours @ 100/hr) is based on a combined effort among the Department's RAPIDS, MMIS, and multivendor staffing contract to implement and support a pilot program. Roll out in future years would require making permanent changes to the IT system and could add additional costs which are unknown at this time
    Total estimated cost for testing was determined by the number of applicants (Total New Applicants: 4,728 x Use Rate: 8.3% = Total Estimated Users: 392) times the estimated cost per test ($56.50) for a total estimated testing cost of $22,172. Estimate of new applications is based on calendar 2014/2015 data. The estimated cost per test ($56.50) is based on the existing statewide contract to test DHHR employees. The 8.3 % use rate estimate is based on a National Institute on Drug Abuse survey of Illicit Drug Use. Maximum Exposure would be $267,132 if all estimated new applicants were tested.
    



Memorandum


    The bill states the applicant can continue to receive benefits while participating in a substance abuse program or job skills program but does not indicate whether or not benefits can continue if applicant has to be on a waiting list for entrance to such program.
    The proposed legislation could bring legal fees associated with the subjectivity of reasonable suspicion (i.e. discrimination). There is no way to quantify these fees.
    The West Virginia Medicaid Provider Manuals, Chapter 529 Laboratory Services, Section 529.4, specifically excludes routine drug screenings from covered services. It is not known whether the applicants for cash assistance would also be eligible for Medicaid; it would be necessary to separately identify those Medicaid members who apply for/receive cash assistance and participate in the pilot program to identify associated screening and/or treatment costs. This would require an additional attribute to member records for identification, within the Medicaid Management Information System, which would increase administrative costs. Medicaid currently covers drug treatment, however if individuals receiving cash assistance that are also Medicaid members elect to enroll in a drug treatment program, it could then increase Medicaid costs. Both of these situations could result in a fiscal impact to Medicaid; however, it is not possible to quantify any such impact at this time with the information available. Individuals that are terminated from cash assistance would not lose Medicaid eligibility.
    Twelve states have passed legislation regarding drug testing or screen for public assistance applicants or recipients (Alabama, Arizona, Florida, Georgia, Kansas, Michigan, Mississippi, Missouri, North Carolina, Oklahoma, Tennessee and Utah.) During the four months of Florida's mandatory drug testing program, only 2.6 percent of applicants (106 out of 4,086), failed the drug test, with an additional 40 people canceling their applications. December 2013, Florida's law was permanently stopped by a District Court judge ruling it violated constitutional protections against unreasonable searches. On December 2, 2014 the 11th US Circuit Court of Appeals upheld the ruling (LeBron v. Wilkins). In 2003, Michigan's drug testing program was struck down as a violation of the Fourth Amendment's protection against searches without reasonable cause (Marchwinski v. Howard).
    Subsection (o) does not specify where the fines shall be deposited.
    No statewide contract exists for the testing of TANF applicants. The estimated costs included in this bill are based on an existing contract in place to test DHHR employees. A separate contract would have to be bid and would take several months to be processed through the competitive purchasing process.
    Current TANF State Plan does not include use of TANF funds for drug testing. A plan modification would need to be submitted and approved before TANF funds could be used to drug test.
    The Office of Inspector General anticipates some additional costs due to increased caseload for the Board of Review. Every effort will be made to absorb these costs during the pilot program. If caseload warrants additional staff, these will be requested after the pilot program becomes permanent.
    



    Person submitting Fiscal Note: Karen L. Bowling
    Email Address: dhhrbudgetoffice@wv.gov