COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. No.:         3834-03

Bill No.:          Perfected HCS for HB 1516

Subject:           Disabilities; Elderly; Health Care; Department of Social Services

Type:              Original

Date:               April 23, 2008

Bill Summary:            This legislation provides protections for senior citizens, disabled persons, and children and transfers the Division of Aging to the Department of Health and Senior Services.

FISCAL SUMMARY

* Unknown savings and losses would net to $0. Numbers within parentheses: ( ) indicate costs or losses. This fiscal note contains 16 pages.

☐ Estimated Total Net Effect on All funds expected to exceed $100,000 savings or (cost).

☒ Estimated Net Effect on General Revenue Fund expected to exceed $100,000 (cost).

FISCAL ANALYSIS

ASSUMPTION

Officials from the Department of Public Safety, Office of Administration, Office of the State Courts Administrator, Office of Prosecution Services and the Department of Labor and Industrial Relations each assume the proposal would have no fiscal impact on their respective agencies.

Officials from the Office of the Attorney General assume any potential costs arising from this proposal can be absorbed with existing resources.

Officials from the Office of the Secretary of State (SOS) state many bills considered by the General Assembly include provisions allowing or requiring agencies to submit rules and regulations to implement the act. The SOS is provided with core funding to handle a certain amount of normal activity resulting from each year’s legislative session. The fiscal impact for this fiscal note to the SOS for Administrative Rules is less than $2,500. The SOS recognizes that this is a small amount and does not expect that additional funding would be required to meet these costs. However, the SOS also recognizes that many such bills may be passed by the General Assembly in a given year and that collectively the costs may be in excess of what the office can sustain with the core budget. Therefore, the SOS reserves the right to request funding for the cost of supporting administrative rules requirements should the need arise based on a review of the finally approved bills signed by the governor.

Oversight assumes the SOS could absorb the costs of printing and distributing regulations related to this proposal. If multiple bills pass which require the printing and distribution of regulations at substantial costs, the SOS could request funding through the appropriation process. Any decisions to raise fees to defray costs would likely be made in subsequent fiscal years.

Officials from the Department of Mental Health (DMH) state the DMH and its service providers are currently required to perform background checks of prospective employees, including sex offenders. There should be no fiscal impact resulting from this proposal.

DMH has an unknown but greater than $100,000 cost for amendment # 6.

Officials from the Office of the State Public Defender (SPD) state for purposes of the proposal, the SPD cannot assume existing staff will provide competent, effective representation for any new cases arising where indigent persons are charged with the proposed new crimes

ASSUMPTION (continued)

While the number of new cases may be too few or uncertain to request additional funding for this specific proposal, the SPD will continue to request sufficient appropriations to provide competent and effective representation in all of the SPD cases.

Oversight assumes the SPD could absorb the additional caseload that may result from this proposal within existing resources. Oversight assumes any significant increase in the workload of the SPD would be reflected in future budget request.

Officials from the Department of Health and Senior Services assume the changes in section 192.2178 will require hospitals, long-term care facilities, and adult day care providers to obtain background screening information that includes a check of the Department of Mental Health Employee Disqualification Registry.

Long-term care, adult day care, and hospitals are not required to use the Family Care Safety Registry for background screenings and tend not to do so. DHSS believes the vast majority of the repeat background screenings required by Section 192.2178 will be requested through the Department of Public Safety. DHSS does not anticipate the bill having a fiscal impact on the Division of Regulation and Licensure.

The assumption is made that any increase in revenue to the DPS, Missouri State Highway Patrol will be reflected in the Department of Public Safety's fiscal note response.

DMH has an unknown but greater than $100,000 cost for amendment # 6.

Officials from the Department of Corrections (DOC) state the proposal includes penalty provision up through a class B felony. The fiscal impact for DOC per year is unknown, less than $100,000.

Officials from the Department of Elementary and Secondary Education (DESE) assume there is no state cost to the foundation formula associated with this proposal. Should the new crimes and amendments to current law result in additional fines or penalties, DESE cannot know how much additional money might be collected by local governments or the DOR to distribute to schools. To the extent fine revenues exceed 2004-2005 collections, any increase in this money distributed to schools increases the deduction in the foundation formula the following year. Therefore the affected districts will see an equal decrease in the amount of funding received through the formula the following year; unless the affected districts are hold-harmless, in which case the districts will not see a decrease in the amount of funding received through the formula

ASSUMPTION (continued)

(any increase in fine money distributed to the hold-harmless districts will simply be additional money). An increase in the deduction (all other factors remaining constant) reduces the cost to the state of funding the formula.

Officials from the Missouri State Highway Patrol state the following: 

According to the Department of Health and Senior Services, the estimated number of persons that are currently employed and will be subject to this new legislation is approximately 228,000. Approximately 100,000 of these 228,000 employees have had background checks performed pursuant to other statutory requirements and will not be part of the initial check process stipulated in this proposed legislation (228,000 - 100,000 = 128,000).

Additionally, it is assumed there will be a 10% turnover rate for these healthcare workers; therefore, 22,800 additional background checks will be needed annually. Each background check costs $20.00 for the state fingerprint check and an additional $19.25 for the nationwide federal check. Of which, the state pays the FBI $17.25.

Estimated Revenue for FY09:

128,000 healthcare workers x $39.25 (state/federal background check)        $ 5,024,000

19,000 (22,800/12 x 10 months) healthcare workers x $39.25                       $ 745,750

FY09 Revenue Total:                                                                                     $ 5,769,750

Estimated Expense for FY09:

128,000 healthcare workers x $17.25 (federal background check charge)     $ 2,208,000

19,000 (22,800/12 x 10 months) healthcare workers x $17.25                       $ 327,750

FY09 Expense Total:                                                                                      $ 2,535,750

Estimated Revenue for FY10 & FY11:

22,800 employees x $39.25 $ 894,900

Estimated Expense for FY10 & FY11:

22,800 employees x 17.25 $ 393,300 

ASSUMPTION (continued)

Officials from the Department of Social Services - Children’s Division (DSS-CD) assume the proposal will require additional staff to work a minimum of three hours to locate a placement with a grandparent.

In Fiscal Year 2006, the CD had 6,130 children enter into care. This proposal would require at least three (3) additional hours per placement to attempt to locate a grandparent.

This calculates to: 6,130 children X 3 hours = 18,390 additional staff hours. 18,390 ÷ 2,080 (number of full-time annual hours) = 8.84 or 9 additional Children Service workers. Additionally, 1 Children's Services Supervisor (7 Children Service Workers to 1 Supervisor ratio) and 2 Senior Office Support Staff (6 Professional Staff to 1 Office Support staff ratio) would be required. This is a total of 12 additional staff.

If a grandparent were unable to be located within those three (3) hours, the fiscal impact would be much greater. Therefore, the CD is submitting a cost of unknown greater than $620,498 for FY 2009. 

Oversight notes that states can earn the federal medical assistance percentage (FMAP) on Medicaid program expenditures. The FMAP used in the DSS-CD response is a 73/27 split between General Revenue Funds and Federal Funds.

Officials from the Department of Social Services (DSS) assume the proposal requires services that can be defined as medically necessary as well as services that are not medically necessary. The MO HealthNet Division (MHD) already reimburses for services that are medically necessary and some services with other specific criteria but does not reimburse for non-medically necessary services.

Medically Necessary Services or Services With Other Specific Criteria:

MHD already provides home visits for medically fragile infants, low birth weight infants, infants diagnosed with failure to thrive and mothers with substance abuse diagnoses. Current programs are the Maternity and Post Discharge Home Visit program; the Healthy Children and Youth program; and the Children's Services Home Health program. In addition, the Department of Mental Health (DMH) provides substance abuse treatment through the Comprehensive Substance Treatment and Rehabilitation (CSTAR) program which is reimbursed by MHD. With the exception of the Maternity and Post-Discharge and CSTAR programs Home Health services must be medically necessary.

ASSUMPTION (continued)

The Maternity and Post Discharge Home Visit program allows a minimum of two visits, at least one of which shall be in the home in accordance with maternal and neonatal physical assessments by a registered nurse. This program is available for mothers whose hospital stay was less than 48 hours for a vaginal delivery or less than 96 hours for a cesarean section delivery.

The Healthy Children and Youth (HCY) Program offers Home Health services through the 1989 OBRA mandate expanding Medicaid services for children based on solely documented medical need.

The Children's Services Home Health program provides services for low birth weight babies and babies diagnosed with failure to thrive. These services are solely for medical need and are not reimbursable for social or emotional issues that may affect the participant's medical condition. Services include up to twelve visits over eight weeks without regard to homebound status and possible additional services based on certain criteria.

In addition, CSTAR services are available through the DMH and reimbursed by the MHD. CSTAR provides a specialized substance abuse treatment program for women and their children with services offered with or without residential support in accordance with eligibility criteria. Priority is given to women who are pregnant, postpartum or have children in their care or custody.

Since these services are already available to MO HealthNet participants who meet either the medically necessary criteria or other specific criteria it is assumed there will be no additional fiscal impact unless there is increased utilization of these services. If there is an increase in utilization then an unknown cost is assumed.

Non-Medically Necessary Services:

Services that are non-medically necessary are not covered under current programs. Therefore, there will be a fiscal impact for those services. At-risk infants or their mothers for whom services may not be available would have to receive services through a referral to another agency or program or under a waiver program through MO HealthNet.

For the sake of perspective if only one percent of the infants eligible for MO HealthNet born in 2006 met the at-risk descriptions in the proposal aside from the medically fragile definitions there would be about 380 infants eligible annually for these non-medically necessary services. This minimum estimate is based on the number of infants born in Missouri who were MO HealthNet eligible in 2006 (37,965 X 1% = 380). It is assumed that this would be the fewest number of children who would participate.

ASSUMPTION (continued)

It is assumed that these infants would receive five skilled nurse visits every twelve months for the two years they are in the program. This estimate is based on historical data published by existing programs in the private sector. It is further assumed that these 380 infants would remain in the program for two years and then exit the program. It is also assumed that in each successive year of the program a new group of 380 infants would enter the program. Therefore, in the first year of the program there would be a minimum of 380 infants and in subsequent years there would be a minimum of 760 (380 X 2 = 760) infants participating. Skilled nurse home visits are currently reimbursed at a rate of $63.27 per visit (15 minutes to 3 hours).

The FY09 cost includes five skilled nurse visits for 380 infants for the first twelve months of their participation in the program for a total cost in the first year of $100,067. Since this is the fewest number of infants expected in the program and the utilization is not definitely known the cost will be unknown greater than $100,067.

The FY10 cost includes five skilled nurse visits for the 380 infants from the previous year (their second twelve months of participation) as well as all first year costs for the new group of 380 infants. The cost would be unknown greater than $250,967.

The FY11 cost includes five skilled nurse visits for the 380 infants from the previous year (their second twelve months of participation) as well as all first year costs for the new group of 380 infants. The cost would be unknown greater than $262,261.

It is assumed that the DSS will apply for a Section 1115 demonstration waiver to implement the portion of this program that requires non-medically necessary services and that DSS will receive a federal match for those services.  

Total costs: FY09 (10 months) unknown greater than $100,067 ($36,835 GR); FY10 cost is unknown greater than $250,967 ($92,381 GR); and FY11 total cost is unknown greater than $262,261 ($96,539 GR). A 4.5% inflation factor was applied to FY10 and FY11 costs.

Oversight notes that states can earn the federal medical assistance percentage (FMAP) on Medicaid program expenditures. The Social Security Act requires the Secretary of Health and Human Services to calculate and publish the actual FMAP each year. The FMAP is calculated using economic indicators from state and the nation as a whole. Missouri’s FMAP for FY09 is a 63.19% federal match. The state matching requirement is 36.81%. Oversight assumes there will be no federal funds available for the non-medically necessary services in FY09 because of the time it will take DOS to apply for and get approval for a Section 1115 demonstration waiver.