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

if they are used for other purposes.

Current FIRs (in HTML & Adobe PDF formats) are a vailable on the NM Legislative Website (legis.state.nm.us).

Adobe PDF versions include all attachments, whereas HTML versions may not. Previously issued FIRs and

attachments may be obtained from the LFC in Suite 101 of the State Capitol Building North.

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

SPONSOR Feldman

ORIGINAL DATE

LAST UPDATED

01/25/08

01/31/08 HB

SHORT TITLE Healthy New Mexico Task Force

SB 129/aSFC

ANALYST Geisler

ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT (dollars in thousands)

FY08

FY09

FY10 3 Year

Total Cost

Recurring

or Non-Rec

Fund

Affected

Total

See

amendment

Recurring General

Fund

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

LFC Files

Responses Received From

Department of Health (DOH)

Human Services Department (HSD)

Health Policy Commission (HPC)

Public Education Department (PED)

SUMMARY

Synopsis of SFC Amendment

The Senate Finance Committee amendment to Senate Bill 129 strikes the $100 thousand

appropriation to the Department of Health. Without this appropriation, the department would

absorb the cost of staff time for this project as discussed below under administrative issues.

Synopsis of Original Bill

Senate Bill 129, for the

Legislative Health and Human Services Committee, would establish a

Healthy New Mexico Task Force (HNMTF) convened by the Secretary of Health to devise a

five-year strategic plan for implementing disease prevention and chronic condition and chronic

disease management measures. One hundred thousand dollars ($100,000) from the general fund

would be appropriated to the New Mexico Department of Health (DOH) for expenditure in fiscal

year 2009 to fund the creation, implementation, technical assistance, supplies, and equipment of

the Healthy New Mexico Task Force.

SB 129 requires that the plan include: 1) a plan for hiring disease management services to control

Senate Bill 129/aSFC – Page

2

costs and encourage healthy lifestyles in the state employees group; 2) recommendations on

implementing the primary care case management project to pay Medicaid fee-for-service

providers a capitated rate for chronic disease management; 3) a plan for insurers to reward

providers for controlling chronic conditions; and 4) recommendations for implementing a pilot

program that will include diabetes and obesity prevention, intervention and case management in

one under-served community. A report from the task force will be provided to the interim

Legislative Health and Human Services Committee by June 30, 2009. Any unexpended balance

remaining at the end of fiscal year 2009 shall revert to the general fund.

FISCAL IMPLICATIONS

The appropriation included in SB 129 is not part of either the Executive or Legislative budget

recommendation for FY09. The appropriation could be used for funding of staff and other

associated costs for implementation, creation and support of the task force.

SIGNIFICANT ISSUES

DOH notes that chronic diseases cause 6 out of 10 deaths in NM. Nearly 890,000 cases of seven

common chronic diseases (cancers, diabetes, heart disease, hypertension, stroke, mental

disorders, and pulmonary conditions) were reported in New Mexico in 2003. (The Milken

Institute. An Unhealthy America: The Economic Burden of Chronic Disease. October 2007.

http://www.chronicdiseaseimpact.com/ebcd.taf.cat=state&state=NM)

These conditions shorten lives, reduce quality of life, and create considerable burden for

caregivers. The Milken Institute has estimated that between 2003 and 2023, NM could

potentially save $6.3 billion (or 26.4%) in direct medical costs and lost productivity due to

chronic diseases if moderate changes toward prevention and screening are made. In Iowa, use of

a Medicaid Primary Care Case Management program was associated with substantial cost

savings ($66 million) from 1989-1997, and this effect increased over time. Cost reductions may

have been mediated by substituting outpatient care for inpatient care. (Health Services Research,

ET Momany et al., Volume 41 Issue 4, Page 1357-1371, August 2006.)

DOH and HPC are already coordinating the development every four years of a comprehensive

strategic statewide health plan which includes strategic objectives, goals and activities related to

chronic disease among other topics.

ADMINSTRATIVE ISSUES

The Secretary of Health would convene the HNMTF, requiring staff support to carry out the

intent of this legislation including development of the five-year plan and the report. A temporary

full-time health educator or comparable classification could be hired to oversee the HNMTF

needs and recommendations in order to avoid taking existing staff away from their current

duties.

OTHER SUBSTANTIVE ISSUES

HSD notes that the Medical Assistance Division (MAD) has studied the possibility of

implementing a PCCM program for many years and has thus far not found this option to be cost

effective. With the majority of current recipients in managed care and others soon to be in a

Senate Bill 129/aSFC – Page

3

coordinated program, there are, or soon will be, few true FFS expenditures.

Through its managed care program, Salud!, MAD mandates participation in disease management

programs that include diabetes and obesity initiatives. The comprehensive plans include

population identification, practice models, patient education and process/outcomes

measurements.

In addition to the disease management programs for diabetes within the individual contractor

plans, the MCO’s has collaborated their efforts through participation in “New Mexico Healthcare

Taking on Diabetes" initiative. This initiative includes provider education, development and

implementation of best practices in management of diabetes statewide and improving patient

outcomes

“Envision" is collaboration between MAD and the UNM Health Sciences Center, community

practices and school based health centers. Initiatives include changing provider practices toward

proactive identification and intervention of pediatric overweight clients and telehealth healthcare

services to Native Americans with focus on obesity, nutrition and mental health.

GG/bb:nt