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F I S C A L I M P A C T R E P O R T
SPONSOR Trujillo
ORIGINAL DATE
LAST UPDATED
2/17/07
HB 894
SHORT TITLE Care For Mentally Retarded Staff Salaries
SB
ANALYST Weber
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
$230.0
Recurring
General Fund
(Parenthesis ( ) Indicate Expenditure Decreases)
Duplicates SB 818
REVENUE (dollars in thousands)
Estimated Revenue
Recurring
or Non-Rec
Fund
Affected
FY07
FY08
FY09
$570.3
$560.0 Recurring
Federal
Medicaid Fund
(Parenthesis ( ) Indicate Revenue Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Human Services Department (HSD)
SUMMARY
Synopsis of Bill
House Bill 894 appropriates $230 thousand from the general fund to the Human Services
Department for the purpose of giving a cost-of-living increase to the staff of intermediate care
facilities for the mentally retarded. The funds are to improve staff recruitment and retention and
to meet increased costs of employee benefits and rising programmatic and operations costs to
maintain quality services to recipients
.
pg_0002
House Bill 894 – Page
2
FISCAL IMPLICATIONS
The appropriation of $230 thousand contained in this bill is a recurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of Fiscal Year 2008 shall
revert to the general fund.
SIGNIFICANT ISSUES
HSD reports that ICF/MR facilities are currently reimbursed on a Prospective Payment Services
(PPS). Rates are rebased every three years based on the previous year's cost. Therefore, a cost
of living increase to a provider for their staff salaries would be included in that provider's cost
report. This will cause the costs to increase, leading to increased rates for that provider.
The next rebasing date for the ICF/MR program is September 1, 2008 (during State FY09).
ICF\MR rates have historically increased by 10% during rebasing years. The FY09 rebasing
may be higher than this historical average due to the additional staff wages that would come with
this appropriation.
HSD uses the following criteria in its decision making process for provider increases.
Historical increases;
Promoting preventive care;
Establishing parity among rates paid for similar services;
Provider costs;
Providers’ dependence on Medicaid as a funding stream;
Rates relative value compared to Medicare.
The ICF/MR providers received a 1.5% rate increase during FY07.
MW/csd