Medicaid reform.

13LSO-0338.C1

FISCAL NOTE

This bill contains an appropriation of $120,000 from the GENERAL FUND to the Department of Health.  This appropriation is effective immediately.

DETAIL OF APPROPRIATION

Agency #:  048     Agency Name:  Department of Health

Unit:  0401        Unit Name:  Healthcare Financing Administration

EXPENDITURE BY SERIES AND YEAR       FY 2013         FY 2014         FY 2015

0900  Contractual Services Costs      $120,000                                  

Total Expenditure Per Year:           $120,000                                 

Grand Total Expenditure:              $120,000

Total Appropriated to Agency:         $120,000

Total Appropriated by Fund

GENERAL FUND             :            $120,000

Description of Appropriation:  This appropriation shall only be expended to hire a contractor consultant to assist the Department of Health for the purpose of studying and developing an implementation plan for Medicaid reform pursuant to this act.

The non-administrative impact of this bill in the form of a revenue increase through fraud prevention and reduction activities is indeterminable. 

Source of Revenue Increase:  Estimates on the amount of fraud in the Medicaid system vary substantially. Every 1% of fraud in the entire Medicaid system represents approximately $5.1 million per year (of which 50% is federal and 50% is State General Funds). However, fraud prevention reduces fraud while also pursuing recoveries so fraud reduction could result in increased revenue or decreased expenditures.

The non-administrative impact of this bill in the form of an expenditure decrease is indeterminable.

Source of Expenditure Decrease: Implementation of the elements identified by the Medicaid Options Study, performed pursuant to Laws 2012, Ch. 103, in the medical services category will translate into savings of $2,000,000 to $10,000,000 per year (50% Federal, 50% State General Funds)starting in FY 2015.

Assumptions:

The health care services category (medical services) within the Medicaid program currently expends approximately $200 million per year.  Savings in long-term care services programs and services for the developmentally disabled/ acquired brain injury programs will be used to reduce growing waitlists without increasing overall expenditures.  All savings projected do not include potential savings from managed care, which are only being studied in this bill.

Prepared by:   Alex Kean, LSO Phone: 777-7881

(Information provided by: Jesse Springer, Dept. of Health Phone: 777-8048)