OFA Fiscal Note

State Impact:	Implements Provisions of the Budget
Affected Agencies:	Various
Municipal Impact:	Implements Provisions of the Budget

Explanation

State and Municipal Impact:

Sections 1 and 2 allow the Department of Social Services (DSS) to provide rate relief to enhance the staffing level of nursing homes in FY03 and FY04, with priority given to facilities most in need whose staffing levels fall below those stated in the bill. HB 7501 (An Act Concerning the State Budget for the Biennium Ending June 30, 2003, and Making Appropriations Therefor) provides $7 million in FY03 for this rate relief needed to improve nursing home staffing levels.

Sections 3 and 4 direct DSS to seek a waiver to extend the penalty period for an improper asset transfer to the time of actual Medicaid eligibility, rather than the time of the asset transfer. These sections also clarify the definition of an available asset for purposes of determining Medicaid eligibility. HB 7501 includes savings of $7.2 million in FY03 to reflect the implementation of this policy.

Section 5 makes several changes regarding the treatment of Medicaid assets concerning spousal support. The probate court is restricted from approving an application for spousal support of a community spouse prior to meeting certain statutory criteria. These changes may limit the court's ability to deviate from the established Medicaid regulations concerning the transfer of assets. HB 7501 includes savings of $2.5 million in each year of the biennium to reflect the implementation of this policy.

Section 6 limits the assets a conservator can allow not to be used towards the cost of care of a DSS client. This section is applied in conjunction with the previous section to achieve the budgeted savings.

Section 7 requires the DSS to provide coverage under the Medicaid program to certain low-income women diagnosed with breast or cervical cancer in accordance with the federal Breast and Cervical Cancer Prevention and Treatment Act of 2000. It is anticipated that this benefit will cost up to $500,000 annually. HB 7501 includes an additional $400,000 in each year of the biennium to implement this Medicaid extension.

Section 8 requires DSS to seek a federal waiver to allow for the coverage of used durable medical equipment under the Medicaid program. In FY00, DSS spent $19.2 million in the Medicaid program for durable medical equipment. To the extent that this waiver allows DSS clients to purchase used equipment at a lower price than new equipment, significant savings may result.

Section 9 requires DSS to pay Medicare Part B payments through a non-lapsing account until the department contracts with the federal government to administer the Medicare Part B Buy-In program. Certain DSS clients are eligible for both Medicaid and Medicare Part B coverage. In such instances, DSS pays the federal government approximately $45 per month per client for Medicare Part-B. This allows the client to receive services under the federally funded Medicare program rather than under the joint state-federally funded Medicaid program, which results in substantial savings to the state. This section implements a provision of HB 7501 that requires DSS to pay for dually eligible Medicare Part B clients through a revenue offset using federal funds. This allows DSS to deduct a federal payment from federal revenue, thus lowering the Medicaid appropriation. This provision is expected to reduce state appropriations and revenue by $45.4 million in FY02 and $47.8 million in FY03. This change will not affect services rendered under the program.

Section 10 allows DSS, with the approval of the Office of Policy and Management, to credit a non-lapsing account with amounts necessary for the payment of the federal share of recoveries or overpayments under the Aid to Families with Dependent Children program. This will allow payments to the federal government to be made from an account that is not appropriated.

Section 11 allows DSS to provide free-standing psychiatric hospitals and chronic disease hospitals with a rate increase of 2.5% for FY02 and 2% for FY03. These rate increases are included in the FY2001-2003 budget.

Section 12 makes several changes to the state's Temporary Family Assistance (TFA) program. First, it imposes a limit of three six-month extensions of benefits, with several specific exemptions. Currently, a family that adheres to the requirements of the program receives 21 months of benefits. At the end of that period, if the family is not earning the TFA payment standard but is otherwise complying with program requirements, they can apply for and receive a six-month extension of benefits. There is no current statutory limit on the number of extensions that can be granted. HB 7501 reduces TFA appropriations by $8.1 million in FY02 and $9.2 million in FY03 to reflect the implementation of this policy.

This section also implements an overall 60-month limit for the TFA program, unless the family has experienced domestic violence. This change brings the state program into compliance with federal requirements under the Temporary Assistance to Needy Families (TANF) program. HB 7501 reduces TFA appropriations by $262,576 in FY02 and $340,604 in FY03 to reflect the implementation of this time limit.

Sections 13 and 14 reduce benefit levels for TFA families who, without good cause, fail to comply with employment service requirements. The first such violation results in a benefit reduction of 25% for 3 months, a second violation results in a reduction of 35% for 3 months, and all subsequent violations result in a termination of benefits for 3 months. This change brings the state program into compliance with federal requirements under the TANF program. This section also requires DSS to terminate benefits if a client fails to attend the initial employment services orientation and assessment or if a client fails to meet employment requirements during a six-month extension period. These sections also specify that an unmarried minor parent is ineligible for TFA unless they are participating in educational activities. HB 7501 reduces TFA appropriations by $2.67 million in FY02 and $3.95 million in FY03 to reflect these changes.

Section 15 requires DSS to disregard the first $50 per month of child support income when determining eligibility and benefit levels under the TFA program. HB 7501 reduces TFA appropriations by $1.4 million in FY02 and $1.7 million in FY03 to reflect this change.

Section 16 makes several changes to the TFA diversion program that are intended to increase utilization. This increased utilization is expected to result in a net savings of $52,920 in FY02 and $302,328 in FY03, which is reflected in HB 7501.

Sections 17 through 19 continue benefits for current qualified aliens participating in the TFA, State Administered General Assistance (SAGA) and state food assistance programs. However, these sections also close these programs to new applicants effective June 30, 2001. HB 7501 reduces appropriations by $1.13 million in FY02 and $1.66 million in FY03 to reflect these changes.

Section 20 allows DSS to implement a system of Primary Care Case Management (PCCM) for the SAGA medical program. DSS may enter into contracts for both medical services and program management to implement this policy. HB 7501 reflects savings of $1 million in FY02 and $5 million in FY03 due to the implementation of SAGA PCCM. This bill also contains $500,000 in FY01 surplus appropriations to assist the department in the implementation of this program.

Section 21 allows experienced dental hygienists to work unsupervised in a preschool operated by a local or regional board of education or head start settings. No fiscal impact is associated with this change.

Section 22 expands the income eligibility limits for the Connecticut Pharmaceutical Assistance Contract to the Elderly and the Disabled (ConnPACE) Program to $20,000 for single persons and $27,100 for couples, effective April 1, 2002. It requires DSS to accept applications from the newly eligible population on and after January 1, 2002. HB 7501 earmarks $2.5 million from the Tobacco and Health Trust Fund and $2.5 million from reimbursements for Medicaid Excess Costs to support this program expansion, and appropriates $19.8 million in FY03 for its annualized cost. An estimated additional 14,000 persons will be enrolled in the program. It further authorizes DSS to increase the ConnPACE Program's income eligibility limits to $25,800 for single persons and $34,800 for couples after July 1, 2002 if a federal waiver is granted which results in the receipt of federal reimbursement.

Section 23 requires managed care organizations that contract with DSS to have primary responsibility for the performance of their vendors. This is not expected to result in any fiscal impact to the state. This section also requires DSS to mandate that HUSKY behavioral health and dental subcontractors post a performance bond letter of credit, statement of financial reserves or payment withholding. The section also establishes several contracting requirements for managed care organizations and their contractors. These changes are not expected to result in any fiscal impact to the state. It should be noted that these new requirements may be a factor in future rate negotiations between DSS and the managed care organizations.

Section 24 allows schools and other educational institutions to continue to utilize interpreters who are not certified by the National Association of the Deaf. The section authorizes educational institutions to use interpreters who are not certified until July 1, 2003. This is an extension of two years for this provision. There will be a minimal savings for municipalities and the state since certified interpreters get greater hourly rates of pay than non - certified interpreters.

Section 25 requires the Department of Children and Families (DCF), when placing a child in a residential facility, to develop a written contract with, receive monthly written reports from, and ensure development of a discharge plan by the facility within two weeks of the child's placement. It is anticipated that the department can accommodate these policy changes within its normally budgeted resources.

Section 26 requires DSS, in collaboration with the Office of Health Care Access (OHCA), to prepare a plan for the purchase of employer sponsored health insurance for children and adults up to 300% of the federal poverty level. This plan must include provisions concerning a sliding fee scale, minimum benefit levels, maximization of federal revenue, an implementation timeline and other components. DSS must submit this plan to the General Assembly by March 1, 2002. DSS and OHCA will incur additional administrative costs associated with developing this plan and submitting the findings to the General Assembly. However, these costs are expected to be minimal and can be absorbed within anticipated budgetary resources.

Sections 27 and 28 allow the Judicial Department to serve income-withholding orders by first-class mail rather than by certified mail. Certified mail costs $3.40 per letter when a return receipt is included, compared to $0.34 per letter for first class mail. This change is expected to save the Judicial Department approximately $135,000 annually.

Section 29 defines the term "underemployed. " It requires the Department of Labor to establish grants for comprehensive job training, and related services for economically disadvantaged, unemployed and underemployed individuals. HB 7501 appropriates $204,323 for this program in each of FY 02 and FY 03.

Section 30 gives DSS discretion concerning the performance of audits of town General Assistance programs. Current statute requires DSS to conduct audits of all town GA programs, although most towns have ceased administering their own GA programs. By giving the department the discretion to choose which audits to proceed with, resources can be concentrated in those areas deemed to be most cost effective.

Section 31 extends the pilot program of home care for elders indefinitely. Under current statute, this ten-person pilot would cease on July 1, 2001. The DSS current service appropriation for the Medicaid program included in HB 7501 assumes continued funding for these individuals.

Section 32 allows DSS to make a security deposit for the equivalent of up to two month's rent and makes several other changes to the security deposit guarantee program. As the language is permissive and the program must be operated within available appropriations, it is not known how many deposits will be increased from an amount equivalent to one month's rent to an amount equivalent to two month's rent. HB 7501 includes no additional funding for this initiative.

Section 33 allows, in cases in which a child's permanency plan indicates adoption, DCF to conduct a thorough adoption assessment and child-specific recruiting. This conforms to current agency practice as is not anticipated to result in additional costs to the agency. Currently, the department purchases child-specific recruiting services on behalf of approximately one hundred children at a cost of $5,000 - $6,000 per child.

Additionally, the court may order that the child be photo-listed within thirty days. The department can accommodate this requirement within its anticipated budgetary resources. The agency currently operates its own photo-listing service with in-house staff and computer resources.

Section 34 establishes a permanency hearing process for youth committed to DCF as delinquent. This conforms state law to federal regulations related to the Adoption and Safe Families Act of 1997. Failure to implement these guidelines will result in assessment of an indeterminate financial penalty, which would be based upon a federally determined "extent of non-compliance." An estimated 700 cases will be heard annually.

Funding, in the amount of $87,000 in FY02, has been included under the budget of the Office of the Attorney General within HB 7501 to reflect the three-quarter year salaries of one (1) Assistant Attorney General and one (1) Paralegal position needed to participate in the hearings, as well as associated other expenses. The sum of $33,000 in FY02 has been included under the budget of the Department of Children and Families (DCF) within HB 7501 to support the three-quarter year salary of one (1) Paralegal position and associated other expenses. This position will be required to assist the agency's parole staff in the completion and filing of court documents and preparation of testimony.

An additional $45,000 in fringe benefit costs will be incurred by the state, for a total cost in FY02 of $165,000. In FY03, the annualized cost of this staffing expansion would be $221,000 in combined operating and fringe benefit costs. These funds have been included within HB 7501.

For each case, counsel for the child will be required to represent the child's interests during the permanency hearing process. It is estimated that a state-funded counsel for indigent clients will be needed in about 500 of these cases. Counsel in these cases could be appointed in three ways: (1) If the child was previously being served through the family with service needs (FWSN) program, the court could require the attorney that had been appointed during the FWSN process to handle the permanency plan hearing; (2) a public defender for juvenile matters could be appointed, or (3) a new court appointed attorney could be assigned. The manner of such appointments will be at the discretion of the judge in each case.

In addition, a court hearing will be required in each of the 700 cases. Each hearing will require the involvement of a judge and support staff, a juvenile prosecutor and defense counsel (whether private, court-appointed or a public defender). This workload can be absorbed within the anticipated budgetary resources and staff of the Judicial Department, the Division of Criminal Justice and the Public Defenders. However, it should be noted that although the assignment of new court-appointed attorneys in these cases is not anticipated to be common, such attorneys are paid $350 per case.

Section 35 makes statute regarding the procedure by which a criminal history records check of a child caring facility seeking licensure by the Department of Children and Families is conducted consistent with current agency practice and has no associated fiscal impact.

Sections 36 and 37 increase to four the number of assisted living demonstration projects in federally funded elderly housing developments that the Department of Economic and Community Development may fund. Such projects are subject to available appropriations. HB 7501 includes $178,540 in FY02 and $72,220 in FY03 in DSS and $178,540 in FY02 and $72,220 in FY03 in the Department of Economic and Community Development to extend assisted living services to additional federally funded facilities.

Section 38 allow for a $250,000 budgeted rate increase in each fiscal year for residential care homes in accordance with the provision outlined in the bill.

Sections 39 and 40 authorize the establishment of a Parent Trust Fund, to be overseen by the Council to Administer the Children's Trust Fund. The Fund shall be used to provide grants to train parents in civic leadership skills and support parental engagement in community affairs. It may receive for deposit only federal or private moneys. An estimated $300,000 in private funding is anticipated to be available for deposit to the Fund in FY02. The council will be able to compile the required annual report within its anticipated budgetary resources.

Section 41 establishes an Eastern Connecticut Transportation Access Project to provide transportation to employment in Eastern Connecticut. This service shall provide transportation from the Greater Hartford, Greater New Haven and Eastern Regions of the state. This project will be funded through the current Transportation for Employment Independence Program providers. HB 7501 includes a FY01 surplus appropriation of $2 million under the Department of Transportation for this initiative.

Sections 42 through 49 establish an integrated behavioral health service delivery system for children and youth, known as Connecticut Community KidCare, to be administered by DSS and DCF within each agency's respective available appropriations. Total funding of $8,705,500 in FY02 and $15,759,257 in FY03 has been included within HB 7501 to support enhanced behavioral health services for children and youth, as follows:

Agency	Purpose	FY02	FY03
Department of Children and Families	Community KidCare	$8,280,500	$14,884,257
Council to Administer the Children's Trust Fund	Expand ChildServ Program Statewide	225,000	675,000
Department of Education	Primary Mental Health Grant	200,000	200,000
	Total	$8,705,500	$15,759,257

Sections 50 and 51 expand the membership of the State Advisory Council on Children and Families from fifteen to seventeen members and make the thirty-one members of the Children's Behavioral Health Advisory Committee eligible for reimbursement for necessary expenses. DCF will incur a minimal cost to reimburse the additional two members of the Council and each member of the Committee for necessary expenses. Other language changes in these sections have no associated fiscal impact.

Section 52 allows the department to provide a rate increase for nursing home facilities of 2.5% for FY02 and 2% for FY03. This increase requires an additional appropriation of $24.5 million in FY02 and $19.6 million in FY03, which has been provided in HB 7501.

Section 53 extends to moratorium on the approval of new nursing home beds from June 30, 2002 to June 30, 2007. This provision was originally enacted to limit the growth of and expenditures for nursing home facilities and to encourage alternative and less expensive forms of elderly care.

Sections 54 limits the conversion of rest home beds to chronic and convalescent nursing home beds unless the conversion can be shown to be cost effective. It also extends the moratorium on rest home beds to June 30, 2007.

Sections 55 and 56 eliminate the cost-of-livings adjustments included in statute for the TFA, SAGA and supplemental assistance programs for FY 02 and FY 03. HB 7501 reduces appropriation by $6.6 million in FY 02 and $11.8 million in FY 03 to reflect this change.

Section 57 transfers responsibility for individuals' performance contracts from DSS to Department of Labor. This change recognizes the current practice concerning the consolidation of the work related to portions of Connecticut's public assistance program within DOL. HB 7501 transferred funding between the appropriate accounts.

Section 58 makes adjustments to the TFA income eligibility rules in order to be consistent across all categories of recipients. HB 7501 reduces appropriations by $442,260 in FY 02 and $565,200 in FY 03 to reflect this change.

Sections 59 and 60 eliminate non-emergency transportation as an available service under the medical benefit component of SAGA. HB 7501 reduces the SAGA appropriation by $4.5 million in FY 02 and $5.2 million in FY 03 to reflect this change.

Section 61 clarifies that a family leaving TFA at the end of the 60-month time limit must have an exit interview for informational purposes in the same manner as a family leaving the program at the end of the 21-month period. Any additional administrative workload as a result of this provision can be absorbed within DSS's normal operation.

Section 62 provides a 3.5% inflation factor in FY 02 and 1.5% inflation factor in FY 03 for the rates provided to intermediate care facilities for the mentally retarded. HB 7501 includes funding for this additional expenditure.

Sections 63 through 65 makes technical changes to certain nursing home and continuing care facilities.

Section 66 allows a higher Medicaid reimbursement to any freestanding chronic disease hospital that has an average of more than 15% of its inpatient days utilized as long-term ventilator patient days. This change is expected to increase Medicaid rate costs by approximately $200,000 annually. However, these increased costs will be offset through savings from not having to provide more expensive acute care hospitalization that can be avoided by providing this care in a less intensive setting.

Section 67 repeals the disproportionate share hospital reimbursement system. It should be noted that this repeal is not necessary.

Section 68 repeals sections of the statute that pertain to DSS's administration of Opportunity Industrialization Centers. HB 7501 transfers $334,323 in FY 02 and $342,346 in FY 03 for the centers to the Department of Labor, which will now administer these services.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either House thereof for any purpose.