Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance

committees of the NM Legislature. The LFC does not assume responsibility for the accuracy of these reports

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

SPONSOR SPAC

ORIGINAL DATE

LAST UPDATED

2/01/07

2/15/07 HB

SHORT TITLE Addiction Recovery Act

SB CS/271/aSPAC

ANALYST Geisler

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Minimal,

see narrative $3,500.0 $3,500.0 Recurring General

Total

Minimal,

see narrative $8,500.0 $8,500.0 Recurring Federal

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

Department of Health (DOH)

SUMMARY

Synopsis of SPAC Amendment

The Senate Public Affairs Committee amendment to the Senate Public Affairs Committee

Substitute for SB 271 changes from July 1, 2008 to July 1, 2007 the due date for submission of

an amendment to the state medicaid plan to the federal centers for medicare and medicaid

services.

Synopsis of Bill

The Senate Public Affairs Committee Substitute for Senate Bill 271 requires HSD to submit an

amendment to the state medicaid plan to the federal centers for medicare and medicaid services

no later than July 1, 2008 to provide a continuum of rehabilitative services to people with

substance abuse problems. The continuum of rehabilitative services outlined in the amendment

shall be no less than comparable to the continuum of services provided to people with mental

health diagnoses.

Senate Bill CS/271/aSPAC – Page

2

FISCAL IMPLICATIONS

HSD provides that given the lengthy process of state plan amendment (SPA) approval by CMS,

the Department does not anticipate a significant fiscal impact in FY08 and believes that any

expenditures that could arise from an earlier CMS approval (prior to July 1, 2008) could be

managed within the existing Medicaid budget. Assuming CMS approval within the year, there

would be a fiscal impact in FY09 of approximately $3.5 million. With this level of state fund

expenditure, there would be a federal match of approximately $8.5 million.

SIGNIFICANT ISSUES

HSD provides:

The current Medicaid benefit package as defined by the Medicaid State Plan is currently very

limited in the area of substance abuse services for adults. The Behavioral Health Services

Division is the primary public funding source for substance abuse services for New Mexicans

age 21 and older, including substance abuse services for Medicaid-eligible adults. Adding

substance abuse services to the benefit package for Medicaid-eligible adults would allow HSD to

maximize Medicaid revenue through increased federal match.

HSD and the New Mexico Interagency Behavioral Health Purchasing Collaborative

(Collaborative) support adding substance abuse services to the State Plan and have been

evaluating the best way to accomplish this. Staff, with the assistance of national consultants,

have been examining potential benefits and services that can be purchased by the Collaborative

and included in the State Plan.

Adding additional services to the State Plan does not require any statutory changes; it does

require that HSD submit a State Plan Amendment to CMS. The Department should not have a

problem meeting the July 1, 2007 deadline proposed in this bill.

PERFORMANCE IMPLICATIONS

HSD notes that having additional substance abuse services covered would help address some of

the Governor’s, the Collaborative’s, and HSD’s goals in the area of behavioral health, including

maximizing state and federal funds through the Medicaid program and the federal substance

abuse and mental health block grants to make the most of limited state and federal funds for

community-based behavioral health services.

ADMINISTRATIVE IMPLICATIONS

In addition to the State Plan Amendment, CS/SB271/aSPAC would also require the

promulgation of new regulations and/or the revision of current regulations.

GG/nt:yr