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F I S C A L I M P A C T R E P O R T
SPONSOR SRCS
ORIGINAL DATE
LAST UPDATED
01/28/08
02/07/08 HB
SHORT TITLE Delay Long-Term Services Changes
SM 17/SRCS
ANALYST Hanika-Ortiz
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)
FY08
FY09
FY10 3 Year
Total Cost
Recurring
or Non-Rec
Fund
Affected
Total
$0.1
Recurring Medicaid/
Medicare
(Parenthesis ( ) Indicate Expenditure Decreases)
Duplicates HM 16
SOURCES OF INFORMATION
LFC Files
SUMMARY
Synopsis of Bill
The SRCS for SM 17 urges continued consideration of stakeholder concerns raised regarding the
design and implementation of the coordinated long-term services program.
The Memorial provides for the following:
The HSD and the ALTSD have plans to implement a new program of managed care for
individuals receiving long-term services, known as coordinated long-term services, beginning on
July 1, 2008.
Persons receiving services provided in the disabled and elderly waiver, the personal care option
or nursing facilities will be required to receive all medical and long-term Medicaid services
through coordinated long-term services.
Concerns from stakeholders have been expressed about whether the coordinated long-tem
services program is designed and will be implemented in such a way as to achieve its stated
goals, including:
whether the number of home and community-based waivers lots will be adequate;
whether existing rules will continue to limit an individual’s access to community
services;
how money follows the person will be implemented;
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Senate Memorial 17/SRCS– Page
2
whether the rates paid to MCOs will be adequate to provide services;
whether the rate structure will provide appropriate incentives; and,
whether implementation will succeed in reducing the wait list and wait time for
community-based waiver services.
The Memorial further provides:
The State should take steps to insure that MCOs provide prompt and appropriate services to
individuals who need long-term services.
There has been limited involvement by the Legislature in development of the program.
Advocates for seniors and persons with disabilities have expressed serious and legitimate
concerns over whether the program, as designed, will increase access to long-term services in the
community rather than in institutions.
FISCAL IMPLICATIONS
HSD reports that federal waiver applications were submitted by the State in early July 2007, and
the Centers for Medicare & Medicaid (CMS) is currently reviewing the proposals. An
interagency implementation team has been formed to assure that once CMS approves the
waivers, the state will be ready to implement the program. Implementation is planned for July
2008 and is to be phased in geographically.
HSD reports that the CLTS rate structure will provide financial incentives to the CLTS managed
care organizations (MCOs) to keep consumers healthy. Health care consumers and advocates are
concerned because the rate structure is critical to how the program works; and, it is not known 1)
whether the rates paid to the MCOs will be adequate to provide needed services; or 2) whether
the rate structure will provide appropriate financial incentives to serve individuals in the
community. Health care consumers and advocates are also concerned that there are inherent
financial incentives for MCOs to underserve individual enrollees in order to maximize profits,
which must be addressed.
The State plans to incorporate the Money Follows the Person Initiative (MFP) into CLTS, and
has begun implementation by requesting and receiving federal approval for an increase in the
number of Disabled and Elderly waiver slots. All additional slots have been allocated to
individuals wishing to leave nursing homes to live in the community. Health care consumers and
advocates note that the MFP will not be possible if sufficient waiver slots aren’t available.
SIGNIFICANT ISSUES
CLTS is a proposed managed long-term care program that will serve an estimated 38,000
Medicaid recipients.
Enrollees will consist of several groups of people. First are those currently enrolled in, or eligible
for New Mexico’s Disabled and Elderly (D&E) waiver program; second, adults receiving
personal care services from the Medicaid Personal Care Option (PCO) program; third, residents
of nursing facilities; and fourth, individuals who are fully eligible for both Medicare and
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Senate Memorial 17/SRCS– Page
3
Medicaid, but who have not yet accessed the system of long-term care services in the state.
Certain qualified individuals with brain injuries who are participating in Mi Via also will be
enrolled in CLTS.
HSD further reports that the CLTS program goals are to eliminate fragmentation, emphasize
home and community-based services over institutional services, and create an opportunity to
manage the escalating costs of long-term services. The CLTS rate structure will provide
financial incentives to the CLTS managed care organizations (MCOs) to keep consumers as
healthy as possible by providing preventive services, treating illnesses early, managing chronic
diseases using best practices, and planning for and coordinating services based on the individual
consumer service and support needs and preferences. Increased access to community services is
expected for individuals in CLTS than in the current fragmented system.
Health care consumers and advocates agree with the program goals but believe the way the
program is designed will not accomplish them. The waiver slots will continue to be limited and
only people in an identified slot will have access to waiver services. Health care consumers and
advocates further believe that all current limitations on access to services will continue; long
waiting lists for community services will continue; and, the number of D&E waivers lots will be
reduced. The State has not managed to instill confidence that this new program design may prove
otherwise.
PERFORMANCE IMPLICATIONS
HSD notes the State has not finalized the number of "slots" (people to be served) in its CLTS
home and community-based waiver application. The figure is being reviewed and will be
adjusted to reflect the current number of Disabled & Elderly waiver slots in the states final
waiver application.
HSD further notes that the Department along with the Aging and Long-Term Services
Department have consulted with stakeholders and held publicly announced monthly CLTS
Stakeholder meetings to provide input on the program design for CLTS. HSD and ALTSD have
also met with individual advocacy organizations, government and health provider representatives
from tribes and pueblos, as well as, provider organizations such as the New Mexico Health Care
Association and New Mexico Home Care Association.
ADMINISTRATIVE IMPLICATIONS
The Memorial further resolves:
that HSD and ALTSD address the concerns identified in this Memorial prior to
implementation of coordinated long-term services,
that the two Departments consult in a meaningful way with representatives of providers
and consumers on the design of the coordinated long-term services program,
the Departments report regularly on the numbers of clients in home and community-
based waiver services, persons receiving personal care option services, the numbers of
persons in nursing homes, and describe any other services provided through the
coordinated long-term services program and the number of people receiving those
services.
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Senate Memorial 17/SRCS– Page
4
The memorial further resolves that copies of this memorial are be transmitted to the chairs of the
interim Legislative Finance Committee and Health and Human Services Committee and to the
secretaries of HSD and ALTSD.
ALTERNATIVES
Once the rate structure and financial incentives are known, health care consumers and advocates
may be more confident that the program will provide the needed services as intended; and,
whether the incentives will work toward the goal of serving people in the community rather than
in nursing homes.
WHAT WILL BE THE CONSEQUENCES OF NOT ENACTING THIS BILL
HSD believes that Medicaid consumers of long-term services will be able to access a coordinated
system of long-term, acute and primary care sooner, rather than later.
QUESTIONS
Will an enrollee be guaranteed that they may continue to receive care from the health providers
within their health care network under the new program.
AHO/mt