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

SPONSOR Lopez

ORIGINAL DATE

LAST UPDATED

2/23/07

3/08/07 HB

SHORT TITLE Study & Define Uncompensated Charity Care

SM 34/aSPAC

ANALYST Baca

APPROPRIATION (dollars in thousands)

Appropriation

Recurring

or Non-Rec

Fund

Affected

FY07

FY08

NFI

Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Health Policy Commission (HPS)

SUMMARY

Synopsis of SPAC Amendment

The Senate Public Affairs amendments add other health care providers to the study, recognize

the uncompensated health care is also provided in offices and other clinics; and change the

composition of the task force to nine from fifteen and require that members of the task force be

appointed by the legislative leadership instead of the governor. The amendments also add that

representation from federally qualified health centers and community-based health care clinics

are included in the task force.

Synopsis of Bill

Introduced for the Legislative Health and Human Services Committee, Senate Memorial 34

requests that the New Mexico Health Policy Commission (HPC) convene a task force to study

uncompensated, indigent and charity care in New Mexico in order to establish a single definition

from which policymakers may reasonably make policy decisions. This definition shall be

presented at the November 2007 meeting of the Legislative Health and Human Services

Committee.

Senate Memorial 34/aSPAC – Page

2

FISCAL IMPLICATIONS

SM 34 designates the Health Policy Commission (HPC) as the lead agency for the activity. The

HPC would be responsible for providing staff support to convene and coordinate the task force

and to distribute copies of the report requested. Presumably, costs involved will be borne by

participating agencies from existing budgets.

SIGNIFICANT ISSUES

Issues cited in SM 34 include the following:

•

New Mexico counties provided $40,700,000 for indigent medical services in FY04;

•

Various hospitals define “uncompensated care" in various ways, including it as bad debt

that will not be collected, as reduction in revenue such as an underpayment from

Medicaid or Medicare, discounts to private payers or other voluntary or involuntary

discounts and as charity care or indigent care for purposes of accounting and for purposes

of reporting on the hospital’s financial status; and

•

Uncompensated care is calculated on a hospital-by-hospital basis and reported according

to any definition a hospital may elect to use.

OTHER SUBSTANTIVE ISSUES

It is reported that nearly 400,000 New Mexicans are with medical insurance coverage. This not

only limits the access to medical care but, as cited in the memorial, leads to hospitals providing

costly uncompensated care at differing rates for the same procedure. Developing and adopting a

standard definition could lead to improved planning as well as maximizing the use of funds avail

for indigent care.

WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL

A single definition of “uncompensated care" may not be established in New Mexico.

LRB/mt