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F I S C A L I M P A C T R E P O R T

SPONSOR Komadina

DATE TYPED 3/7/05

HB

SHORT TITLE Responsibility to Vulnerable Citizens

SB SJM 67

ANALYST Collard

APPROPRIATION

Appropriation Contained Estimated Additional Impact Recurring

or Non-Rec

Fund

Affected

FY05

FY06

FY05

FY06

See Narrative Recurring General Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

Relates to HB 172, HB 318, SB 62, SB 220, SB 259, SB 423 and SB 979

Relates to Appropriation in the General Appropriation Act

REVENUE

Estimated Revenue

Subsequent

Years Impact

Recurring

or Non-Rec

Fund

Affected

FY05

FY06

See Narrative Recurring

Federal

(Parenthesis ( ) Indicate Revenue Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Human Services Department (HSD)

Aging and Long-Term Services Department (ALTSD)

SUMMARY

Synopsis of Bill

Senate Joint Memorial 67 resolves that additional financial resources be provided to DOH,

ALTSD, and HSD to eliminate all waiting lists and to accommodate the increasing costs of pro-

viding care with the following programs: the Family Infant Toddler (FIT) Program, Develop-

mental Disabilities (DD) Waiver; Intermediate Care Facilities for the Mentally Retarded; Dis-

abled and Elderly (D&E) Waiver; Traumatic Brain Injury (TBI) Service; and the Personal Care

Option (PCO). The joint memorial does not address the amount of money required to address

these needs, nor the fund(s) affected.

Senate Joint Memorial 67 -- Page 2

Significant Issues

DOH indicates the FIT Program served a total of 7,925 children and their families in fiscal year

2004 and has experienced an average growth rate of 13 percent per year over the past four years.

An independent rate study of the FIT Program, conducted in 2003, recommended an increase in

the rates for early intervention services based on an analysis of the actual costs of delivering

those services across New Mexico and an annual cost of living increase of 3.2 percent. The

HAFC adopted budget recommendation includes $250 thousand to fund the expansion of chil-

dren birth to three and their families served in the FIT Program. There is currently no waiting list

for FIT Program services.

DOH also indicates, in January 2005, there were 3,057 applicants listed on the DD Waiver Cen-

tral Registry for services. The joint memorial promotes funding to serve approximately all of

these individuals. The current average length of wait for services through the DD Waiver is 47

months, although this varies by region. In addition, of the financial resources needed to eliminate

the DD waiting list approximately 8.6 percent will be needed for program administration and

participant support services.

HSD indicates the TBI program serves approximately 600 individuals per year, does not have a

wait list for eligible individuals, and is not an entitlement program. All identified eligible per-

sons receive case management and life skills based on their needs and preferences. Crisis interim

funds pay for a variety of needs including prescriptions, personal care, homemaker and others.

The amount of crisis interim funds a person receives is based on severity of need and available

funds. When crisis interim funds are exhausted for the year, individuals must wait until addi-

tional funds become available. If sufficient funds for the TBI program are made available to

meet the needs of identified eligible persons through this joint memorial, additional resources

could result in services to a greater number of people in addition to increasing the nature, amount

or cost of services.

HSD also notes the D&E Waiver program is not an entitlement program. The number of persons

served and the amount of services provided to eligible recipients are dependent upon the legisla-

tive appropriation for each year.

The joint memorial does not include the Home and Community Based Services Medically Frag-

ile Waiver program in the list of programs that have wait lists and serve people with disabilities

or children with, or at risk of, developmental delays. The Medically Fragile Waiver program,

administered by DOH, serves the same population described in the joint memorial.

For each of the waiver programs implicated by this memorial, federal approval and FFP to add

additional individuals beyond the existing approved waivers would be required.

There would be substantial administrative costs to each agency to eliminate central registry wait

lists and increase the services to identified individuals. There would also be costs to recruit, en-

roll and train new providers. It is unlikely that sufficient providers could be recruited to meet the

needs of additional service recipients, without significant rate increases for all services provided

in the existing programs. Although data is not available, it is possible that there will not be suffi-

cient providers to meet the needs of the additional service recipients in the state, even with sig-

nificant rate increases, especially for the providers who are required to be licensed.

Senate Joint Memorial 67 -- Page 3

FISCAL IMPLICATIONS

There is no appropriation in this joint memorial and all of these programs are currently funded in

the House Appropriations and Finance Committee-adopted budget for FY06 in their respective

agencies.

HSD indicates if 35 percent of persons on the DD Waiver wait list were able to receive DD

Waiver services, it would cost an additional $84.8 million, including $23.8 million from the gen-

eral fund and $61 million in federal financial participation (FFP), to provide DD Waiver ser-

vices. If 80 percent of persons on the DD Waiver wait list were able to receive DD Waiver ser-

vices, it would it would cost an additional $174.1 million, including $48.8 million from the gen-

eral fund and $125.2 million in FFP, to eliminate the DD Waiver central registry wait list. These

costs would be recurring.

The DD Waiver program is a Medicaid program administered by DOH. Persons who receive

waiver services also receive full Medicaid benefits. Based on the percentage of persons who

were eligible for services, there would be additional costs between $8.6 million and $19.7 mil-

lion from the general fund and FFP to HSD to cover Medicaid state plan non-waiver services to

the additional eligible 1,225 to 2,800 persons currently on the DD Waiver central registry.

DOH indicates, as allowed under federal guidelines, 8.6 percent of the appropriation would need

to be used by DOH for program administration and participant support services.

ALTSD indicates the joint memorial recognizes the need for additional funding to meet the

needs of our “vulnerable citizens” and resolves that additional resources be provided to meet

these needs. The cost of appropriating additional funds to provide the additional services to meet

the needs of our “vulnerable citizens” would be substantial. Without an appropriation for addi-

tional resources, the resolutions in the joint memorial cannot be accomplished.

HSD notes, if all persons on central registry wait lists for the D&E Waiver program were pro-

vided services, the costs to the state would be significant. Data is not kept to determine the num-

ber of persons on the D&E Waiver central registry wait list who would be medically and finan-

cially eligible for waiver services. However, estimates indicate that 35 percent to 80 percent of

persons on the D&E Waiver central registry wait list would be medically and financially eligible

for waiver services.

If 35 percent of persons on the D&E Waiver wait list were able to receive D&E Waiver services,

it would cost an additional $48.3 million, including $13.6 million from the general fund and

$34.8 million in FFP to eliminate the D&E Waiver central registry wait list. If 80 percent of per-

sons on the D&E Waiver wait list were able to receive D&E Waiver services, it would it would

cost an additional $110.4 million, including $31 million from the general fund and $79.4 million

in FFP to eliminate the D&E Waiver central registry wait list.

The D&E Waiver program is a Medicaid program administered by ALTSD. Persons who re-

ceive waiver services also receive full Medicaid benefits. Based on the percentage of persons

who were eligible for services, there would be additional costs between $12.7 million and $29

million from the general Fund and FFP to HSD to cover Medicaid state plan, non-waiver ser-

vices to the additional 2,503 to 5,720 persons currently on the D&E Waiver central registry.

Between the DD and D&E Waivers, using estimates that 35 percent to 80 percent of persons on

the central registry wait lists would be eligible to receive waiver services, and including Medi-

Senate Joint Memorial 67 -- Page 4

caid state plan (non-waiver) services, it would cost an estimated additional $154.4 million to

$333.2 million in combined general fund and FFP to eliminate the DD and D&E Waiver central

registry wait lists.

The other programs listed in SJM 67 that impact HSD/MAD include ICFs-MR and PCO. The

fiscal impact of SJM 67 to HSD/MAD for these programs would also be significant. Since these

programs are entitlement services, it is not possible to estimate the fiscal impact without an ap-

propriation. The appropriation would be allocated to each program and changes made to the

programs based on budget parameters.

ADMINISTRATIVE IMPLICATIONS

DOH notes if this joint memorial results in additional funding for the FIT Program it would not

result in significant administrative costs. DOH also notes if the joint memorial results in addi-

tional funding for individuals with DD to access the Waiver, the impact to DOH will be signifi-

cant. In previous fiscal years, additional FTE were created which enable DOH to ensure that the

management standards mandated by federal law for the Central Registry and the Medicaid proc-

esses are upheld.

RELATIONSHIP

Senate Joint Memorial 67 relates to House Bill 172 and its duplicate Senate Bill 62 which appro-

priates $3 million to DOH for increased funding for the FIT Program statewide system of early

intervention services for children who have or are at risk of developmental delays and disabili-

ties; House Bill 318 and its duplicate Senate Bill 220 which adds new language to the Public As-

sistance Act to provide long-term home and community based services to persons with Trau-

matic Brain Injury and appropriates $2 million to ALTSD in cooperation with HSD to provide

these services; Senate Bill 259 which appropriates $6.4 million to DOH to allocate approxi-

mately 400 persons who are not currently enrolled in the DD Waiver program; Senate Bill 423

which appropriates $3.54 million to DOH for the DD Waiver program; and Senate Bill 979

which appropriates $5 million to DOH for the DD Waiver program and $5 million to ALTSD for

the D&E Waiver program.

OTHER SUBSTANTIVE ISSUES

The FIT Program at DOH is the lead agency under the Individuals with Disabilities Education

Act (IDEA) Part C for the administration of a statewide system of early intervention services for

infants and toddlers, under the age of three, who have or are at risk for developmental delays or

disabilities. The FIT Program is an entitlement program for children and families who are eligi-

ble for the FIT Program in accordance with the “Requirements For Family Infant Toddler Early

Intervention Services.”

The FIT Program utilizes general fund monies and Medicaid special rehabilitation (fee-for-

service) monies to fund early intervention services through a network of private and public pro-

viders. The FIT Program pays the match for early intervention services provided through Medi-

caid Special Rehabilitation. Additionally, the FIT Program utilizes the annual federal IDEA Part

C grant to fund certain early intervention services statewide. Expenditures for the FIT Program

in FY04 were $8.9 million from the general fund, including Medicaid match funds from DOH,

$9.4 million from Medicaid and $2.8 million from federal IDEA grant funds.

Senate Joint Memorial 67 -- Page 5

Under New Mexico’s DD Waiver agreement with the federal Department of Health and Human

Services in FY05, the DD Waiver Program is authorized to serve up to 4,300 unduplicated indi-

viduals or the number of individuals allowed by legislative appropriation, whichever number is

less. DOH indicates passage of this joint memorial would expand the numbers of individuals

served well above federal authorization limits on the size of the DD Waiver population and

would require an amendment to the DD Waiver. The number that can be served also depends on

the level of care and age characteristics of the clients on the Central Registry.

DOH cautions if the recommendations of the joint memorial are funded, aggressive recruitment

and training initiatives will be needed to qualify providers, permit entry of persons into the sys-

tem, and ensure their health and safety. Historically, the provider system has been able to sustain

growth at a maximum of 300 to 400 individuals entering into service within any fiscal year. Tim-

ing of individuals entering services as well as the type of services needed would be critical.

ALTSD commits to working with HSD and DOH to explore possibilities and make recommen-

dations on ways to assist New Mexico families with the provision of care necessary for the dis-

abled and elderly population.

KBC/yr:lg