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

SPONSOR Sanchez, B.

ORIGINAL DATE

LAST UPDATED

03/08/07

HB

SHORT TITLE Medicaid Substance Abuse Rehab Services

SB SM 72

ANALYST Weber

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY07

FY08

FY09 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

$3,500.0 $3,500.0 Recurring General

$8,500.0 $8,500.0 Recurring Federal

Medicaid

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HM 75

SOURCES OF INFORMATION

LFC Files

Responses Received From

Human Services Department (HSD)

SUMMARY

Synopsis of Bill

Senate Memorial 72 would direct the Human Services Department (HSD) to submit an

amendment to the State Medicaid Plan to the federal centers for Medicare and Medicaid Services

(CMS) no later than July 1, 2008, to add a continuum of rehabilitative services to people with

substance abuse problems that is no less than comparable to the continuum of services provided

to people with mental health diagnoses.

FISCAL IMPLICATIONS

The Human Services Department reports:

Given the current lengthy process of State Plan Amendment (SPA) approval by CMS, HSD does

not anticipate a significant fiscal impact in FY08 and believes that any expenditures that could

arise from an earlier approval (prior to July 1, 2008) could be managed within the existing

Medicaid budget. Assuming CMS approval within a year, Medicaid would expect a fiscal

impact in FY09 of approximately $3.5 million. With this level of state fund expenditure, there

Senate Memorial 72 – Page

2

would be a federal match of approximately $8.5 million, using the current FY07 Federal match

rate.

Adding a new Category of Service would require software changes made to the Medicaid

Management Information System and would be handled within the existing maintenance.

SIGNIFICANT ISSUES

HSD continues that the Medicaid benefit package as defined by New Mexico’s Medicaid State

Plan is currently very limited in the area of substance abuse services for adults. The Behavioral

Health Services Division is the primary source of public funds for substance abuse services for

persons 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 a continuum of community-based substance abuse services to the

State Plan and have been evaluating the best way to accomplish this.

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. HSD should not have a problem

meeting the July 1, 2008 deadline proposed in this bill.

MW/csd