OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

EMERGENCY CERTIFICATION

HB-8002

AN ACT IMPLEMENTING THE PROVISIONS OF THE BUDGET CONCERNING HUMAN SERVICES AND PUBLIC HEALTH.

OFA Fiscal Note

State Impact:

Agency Affected

Fund-Effect

Various State Agencies

GF - Implements the Budget

Municipal Impact: None

Explanation

Section 1 reduces the nursing home user fee from 6% to 5. 5%. As this aligns statute with federal requirements as well as current practice, there is no associated fiscal impact.

Section 2 provides a cost of living adjustment (COLA) for the Temporary Family Assistance and State Administered General Assistance cash assistance programs. HB 8001 (the FY 08-09 biennial budget bill) contains $4. 1 million in FY08 and $8. 2 million in FY09 for this change.

Section 3 defers a statutory COLA for the supplemental assistance programs over the biennium. The budget bill reflects savings of $2. 1 million in FY08 and $4. 1 million in FY09 for this change.

Sections 4 and 21 amend the Medicare Part D Supplemental Needs Fund to reflect current program operations and to clarify that the Fund will cover those drugs determined to be medically necessary. The budget bill contains $5 million in each year of the biennium for this Fund.

Section 5 raises the number of approved slots under the Money-Follows-the-Person grant from 100 to 700, to bring the statutes into compliance with a demonstration grant received from the federal government. The federal grant, as well as funding included in the budget bill, anticipates that 700 slots will be filled over the 5 year period of the federal grant. The budget bill includes $2,720,800 in FY08 and $5,630,700 in FY09 under DSS to implement the program.

Section 6 limits the circumstances in which institutionalized Medicaid applicants could assign their spousal support rights to the Department of Social Services (DSS). Institutionalized Medicaid applicants would no longer be able to shelter assets in the name of the community spouse, in excess of those already protected under the law. The budget bill reflects savings of $1. 4 million in FY08 and $3. 6 million in FY08 to reflect this change.

Section 7 makes a technical change to P. A. 07-185 (AAC the HealthFirst Connecticut and Healthy Kids Initiatives) to ensure that individuals currently enrolled in the HUSKY program remain so enrolled. This section also eliminates a HUSKY cost sharing requirement that was never implemented. The section has no fiscal impact.

Section 8 requires DSS to implement a premium sharing component to the HUSKY plan, part A. The budget bill contains $500,000 in FY08 to develop this program and reflects a net savings of $4. 9 million in FY09 from the implementation of the program.

Sections 9 and 72 amend P. A. 07-185 concerning Medicaid coverage of pregnant women up to 250% FPL to align the program with the funding available under the budget bill. The budget bill contains $3. 5 million in each year of the biennium to expand this coverage.

Section 10 amends P. A. 07-185 to clarify provisions in a prevention plan. There is no associated fiscal impact.

Sections 11 and 12 provide a 2. 9% Medicaid rate increase for nursing homes and intermediate care facilities for the mentally retarded (ICF/MR's) in FY08. The budget bill contains $39 million in each year of the biennium for this increase.

Section 13 provides for a 2% rate increase for the room and board component of Community Living Arrangements (CLA's). The budget bill includes $2 million in FY08 and $4. 2 million in FY09 for rate increases for CLA's and residential care homes.

Section 14 clarifies DSS's authority to provide limited non-emergency medical transportation and vision services under the SAGA program. The budget bill contains $2. 5 million in each year to provide such services.

Section 14 also allows DSS to provide a step-down level of services for SAGA clients improperly residing in chronic disease hospitals. The budget bill reflects savings of $500,000 in each year of the biennium from this initiative.

Section 15 increases DSS child day care center rates based on certain staff qualifications. The budget bill contains $2. 2 million in FY08 and $4. 5 million in FY09 to increase these rates.

Section 16 requires DSS to develop a pilot primary case management system for at least 1,000 current HUSKY A clients. The budget bill contains $2. 5 million in each year to implement this system.

Sections 17, 44 and 72 amend P. A. 07-185 to repeal provisions that increased coverage under the HUSKY program to 400% of the Federal Poverty Level (FPL). This aligns statute with the funding available under the budget bill.

Section 17 also amends P. A. 07-185 to specify that uninsured newborns are covered for 4 months after birth, which aligns statute with the funding available under the budget bill. The budget bill contains $4. 6 million in FY08 and $8. 8 million in FY09 to reflect the 4 months of coverage.

Sections 18 through 21 implement third party liability changes to ensure that Medicaid is the payor of last resort, as required by the federal Deficit Reduction Act. The budget bill reflects savings of $2 million in each year of the biennium due to this change.

Section 22 requires DSS to make the full June Medicaid nursing home payment for services rendered in June. The budget bill contains $50 million in FY08 to correct this Medicaid payment issue.

Section 23 establishes a Charter Oak Health Plan for uninsured adults, from age 19 to 64, of all income levels. Financial assistance with premium costs will be provided on a sliding scale based on an individual's gross earnings, ranging from $175 for individuals with income under 150% FPL to no assistance for clients with income over 300% FPL. The budget bill contains $2 million in FY08 to design and implement this plan and $11 million in FY09 to reflect the provision of benefits.

Section 24 stipulates that each local or regional board of education require each pupil to annually report whether the pupil has health insurance. This requirement will result in a cost of approximately $50,000 annually for additional forms. The bill is not clear whether the cost of these forms is to be borne by the school boards, the State Department of Education or DSS.

It is expected that through enhanced identification of uninsured children and subsequent referral to the HUSKY programs, DSS will realize increased enrollment in these programs. The budget bill assumes that an additional 3,300 children will be enrolled under this initiative, at a cost of $5. 4 million in FY08 and $8. 4 million in FY09.

Section 25 delays the establishment of the Department on Aging until July 1, 2008.

Section 26 amends the state food stamp eligibility policies to align with current practice. As such there is no related fiscal impact.

Section 27 provides chronic disease hospitals under the Medicaid fee-for-service system with a 4% rate increase in FY08. The budget bill contains $2. 6 million in each year of the biennium to reflect this change.

Section 27 also provides for an increase in the base discharge rate for general hospitals under the Medicaid fee-for-service program. The budget bill contains $46. 2 million in FY08 and $72. 6 million in FY09 for Medicaid rate increases for general hospitals.

Section 28 allows DSS to expend up to $30 million in FY08 for grants to hospitals that can demonstrate substantial financial hardship. The budget bill contains $30 million in FY08 for this purpose.

Section 29 allows DSS to establish within available appropriations a state funded pilot program for certain people with disabilities. Up to $400,000 may be available under the budget bill for such a program.

Sections 30 through 43 implement inspections of managed residential communities. Funding of $39,500 in FY 08 and $132,000 in FY 09 has been included within the budget bill under the Department of Public Health (DPH) to support costs of additional staffing and other expenses. This will support the salaries of one Nurse Consultant, one Office Assistant and a time Processing Technician needed to commence biennial licensure inspections, prepare written reports, investigate complaints and pursue disciplinary actions when warranted. One quarter year funding has been provided in FY 08, to reflect a 4/1/08 effective date.

The Office of the Attorney General can perform its duties under Section 36 of the bill without requiring additional staffing. Any expenses incurred to litigate these matters are anticipated to be minimal, and would be passed on to the DPH.

Should the implementation of the new regulatory program increase the cost of assisted living operations and/or result in fewer assisted living slots being available statewide, Medicaid may realize increased utilization of more expensive nursing home services. Currently, the Department of Social Services spends an average of $78,000 annually.

A potential revenue gain to the state would result, to the extent that civil penalties of up to $5,000 are assessed upon non-compliant residences.

Section 45 increases the burial benefit provided by the Department of Veterans' Affairs (DVA) for eligible veterans from $150 to $1,800. The budget bill includes an increase of $6,300 (this results in a FY 08 and FY 09 appropriation of $7,200) to DVA's Burial Expenses account.

Section 46 allows DVA to establish and maintain a Veterans' Health Registry; study the effects of environmental hazards on returning members of the armed forces; and coordinate provisions of health care services to such members. The budget bill includes $165,000 in FY 09 to implement the registry.

Sections 47-60 implement a comprehensive childhood lead program. Funding of $650,409 in FY 08 and $992,590 in FY 09 has been included under DPH within the budget bill to support associated state and local costs. The first year sum includes $600,000 from anticipated FY 07 surplus funds carried forward into FY 08 to support the purchase of needed laboratory equipment. Budgeted FY 09 funding will also allow the DPH to reimburse local health authorities for costs incurred in the course of conducting additional on-site inspections of sources of lead. The annualized cost associated with this initiative will be approximately $1. 5 million commencing in FY 10.

Local costs may increase significantly commencing in FY 12, as the bill would require local intervention when a health director is notified of any child having an elevated blood lead level equal to or greater than 10 micrograms per deciliter, on and after 1/1/12, if at least one percent of the children in the state under age six have reported elevated blood lead levels of at least 10 micrograms per deciliter.

It is anticipated that local health authorities will accommodate revised regulatory provisions contained within sections 55-57 within their routine workload.

Section 50 requires local health directors to provide information to parents of children with elevated blood lead levels concerning the child's potential eligibility for the Birth-to-Three program. To the extent that this results in additional evaluations and increased enrollment in the program, an additional cost may result to the Department of Mental Retardation (as this is an entitlement program). Although the bill does not change eligibility for Birth-to-Three services, the provision may result in identifying eligible children earlier than may have otherwise occurred. The average annual net cost per child is $7,300.

The bill mandates that health insurance policies cover lead screening and risk assessments ordered by a child's primary care provider. This provision is anticipated to increase costs for the state and certain municipal health insurance plans that cannot be determined at this time. Such cost would be mitigated by the savings associated with future health problems prevented by the early detection of elevated lead levels.

Should implementation of the comprehensive lead screening program mitigate the incidence of lead poisoning in children or reduce the severity of such poisoning, future indeterminate savings in the areas of educational and health services may result.

Sections 61 and 62 increase per capita subsidies for full-time health departments and health districts by approximately 25%. Funding of $1,000,005 in each of FY 08 and FY 09 has been included within the budget bill to reflect these increases.

Section 63 allows the Department of Mental Health and Addiction Services (DMHAS) to annually review the status of certain nursing home residents. There is no direct fiscal impact from this change.

Sections 64, 65 and 69 amend P. A. 07-185 concerning coverage of individuals up to the age of 26 under their parent's health insurance to align the policy with the funding available under the budget bill. The budget bill contains $4 million for the Office of the State Comptroller to implement this policy effective January 1, 2009.

Sections 66 and 72 amend P. A. 07-185 concerning the Connecticut Health Information Network (CHIN) to align the program with the funding available under the budget bill. The budget bill contains $500,000 in each year of the biennium under the University of Connecticut Health Center to design and implement CHIN.

Section 67 amends P. A. 07-185 concerning the membership of the HealthFirst Connecticut Authority. There is no direct fiscal impact from this change.

Section 68 and 72 modifies provisions contained within P. A. 07-185 by stating that the DPH shall contract through a competitive bid process for the development of a state-wide health information technology plan, including, but not limited to, electronic data standards. The budget includes $750,000 to support costs associated with these efforts. The Office of Health Care Access will be able to consult in this effort within its normally budgeted resources.

Section 70 establishes grants to expand school-based health clinic services for priority school districts and areas designated by the federal Health Resources and Services Administration as health professional shortage areas, medically underserved areas or areas with a medically underserved population. The budget bill contains $2. 5 million in each of FY 08 and FY 09 under DPH to support these grants.

Section 71 authorizes the DPH to expend funds in FY 08 to make payments to providers for the purpose of addressing funding reductions under the federal Ryan White Program, and enter into contracts with health departments in the Hartford or New Haven Ryan White Transitional Grant Areas for a similar purpose. The budget bill contains $2,464,674 in FY 08 to address the Federal funding reduction.

Section 72 repeals sections 35-43, inclusive of PA 07-185. In aggregate, these sections appropriated $6. 4 million in FY 08 and $2. 0 million in FY 09 for various health care initiatives.

Section 72 also repeals House amendment B to sHB 7163 of the 2007 session. This precludes the transfer of an estimated $14. 5 million in FY 08 million from the Tobacco and Health Trust Fund to the Department of Mental Health and Addiction Services. These funds were to have supported a state-wide tobacco education program.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

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 chamber thereof for any purpose.