OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

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

EMERGENCY CERTIFICATION

HB-7005

AN ACT IMPLEMENTING THE PROVISIONS OF THE BUDGET CONCERNING HUMAN SERVICES AND MAKING CHANGES TO VARIOUS SOCIAL SERVICES STATUTES.

OFA Fiscal Note

State Impact: Implements provisions in the Budget

Municipal Impact: Implements provisions in the Budget

Explanation

Sections 1 through 18 of the bill implement the False Claims Act related to Medicaid and medical assistance programs administered by the Department of Social Services (DSS). P. A. 09-3 (the FY 10 – FY 11 biennial budget) assumed savings of $500,000 in FY 10 and $1 million in FY 11 for this change.

Section 19 delays implementation of the Department on Aging until July 1, 2010. P. A. 09-3 assumes a related savings of $449,000 in FY 10.

Sections 20, 55, 64, and 78 eliminate state funded Medicaid benefits for certain legal aliens. Benefits would be continued for income eligible children and pregnant women, as well as those currently enrolled as home care clients or nursing home residents. The state had been covering all these individuals with no federal matching funds. Federal law recently changed to allow a federal match for the women and children. P. A. 09-3 assumed savings of approximately $9. 5 million annually due to this eligibility change.

Sections 21 through 29 merge the Children's Trust Fund into DSS. One position and $11. 5 million in FY 10 ($13. 8 million in FY 11) have been transferred within P. A. 09-3. This reflects savings of $1. 1 million in FY 10 and $1. 4 million in FY 11 due to the merger. These sections also make various technical and other changes that have no associated fiscal impact.

Section 30 requires dually eligible individuals to enroll in benchmark Medicare Part D plans. P. A. 09-3 assumed savings of $900,000 in FY 10 and $1. 8 million in FY 11 for this change.

Section 31 requires dually eligible individuals to contribute up to $15 per month for copayments on Medicare Part D pharmaceuticals. P. A. 09-3 assumed savings of $2. 7 million in FY 10 and $2. 9 million in FY 11 for this change.

Sections 32, 35, and 40-42 eliminate statutory Medicaid rate increases for nursing homes, Intermediate Care Facilities for the Mentally Retarded (ICF/MR) and residential care homes for the biennium. Section 32 also eliminates fair rent adjustments for homes that have not yet had a certificate of need approved. P. A. 09-3 assumed savings of $122. 7 million in FY 10 and $181. 9 million in FY 11 for these changes.

Section 33 increases the annual enrollment fee for the ConnPACE program from $35 to $45 and establishes an open enrollment period. P. A. 09-3 assumed savings of $500,000 in FY 10 and $850,000 in FY 11 for these changes.

Section 34 establishes a prior authorization procedure for certain high-cost drugs and changes the current 30-day emergency prescription fill policy to 14 days. P. A. 09-3 assumed savings of $1. 55 million in FY 10 and $1. 8 million in FY 11 for these changes. This section also allows prior authorization for over-the counter drugs. P. A. 09-3 assumed savings of $750,000 million in FY 10 and $1. 5 million in FY 11 for these changes.

Sections 36 and 37 eliminate cost of living adjustments for the DSS cash assistance programs. P. A. 09-3 assumed savings of $7. 7 million in FY 10 and $11. 8 million in FY 11 for this change.

Section 38 allows mental health drugs to be included in the DSS prior authorization process. P. A. 09-3 assumed savings of approximately $1 million annually for this change.

Section 39 delays half the June, 2011 Medicaid nursing home payment until July, 2011. This results in a one-time savings of $53. 1 million in FY 11.

Section 43 caps the number of allowable beds under the small house nursing home project. P. A. 09-3 assumed savings of $1. 5 million in FY 11 for this change.

Section 44 requires residential care homes to have an employee certified in medication administration. Such employees may administer non-injection medications, unless a resident's physician specifies that the medication must be administered by a nurse. P. A. 09-3 assumed savings of $900,000 in FY 10 and $1. 8 million in FY 11 for this change.

Sections 45 and 46 increase the number of child support officers at DSS from 4 to 6 and further clarifies the jurisdiction of the State Marshalls concerning DSS child support cases. P. A. 09-3 assumed a net revenue gain of $85,000 annually from increased child support collections related to this change.

Section 47 requires ConnPACE recipients to enroll in benchmark Medicare Part D plans. P. A. 09-3 assumed savings of $900,000 in FY 10 and $1. 8 million in FY 11 for this change.

Sections 48 and 49 subject DSS non-emergency dental services to prior authorization and subject emergency dental services to review for appropriateness of payment. P. A. 09-3 assumed savings of $8 million annually for this change.

Section 50 requires DSS to notify the General Assembly whenever amendments are made to the state Medicaid plan. DSS can comply with this requirement with minimal additional administrative costs.

Section 51 requires DSS to submit a copy of the Child Care and Development Fund Plan to the General Assembly biennially. DSS can comply with this requirement with minimal additional administrative costs.

Sections 52 through 54 establish, within available appropriations, a fall prevention program in DSS. These sections also specify that funding necessary for the program be taken from the Insurance Fund via the current industry assessment process. P. A. 09-3 appropriates $500,000 annually for this program.

Section 55 requires DSS to submit a federal waiver to include the current population of the State Administered General Assistance (SAGA) program within the state Medicaid program. P. A. 09-3 included additional appropriations of $43. 3 million in FY 10 and $91 million in FY 11 to reflect elevating current SAGA rates to the Medicaid level. These additional costs are offset by new anticipated federal revenue of $50. 1 million in FY 10 and $129. 5 million in FY 11. Therefore, should this federal waiver be approved, the state would realize a net savings of $6. 8 million in FY 10 and $38. 6 million in FY 11.

Section 56 requires DSS to include foreign language interpreter services in the state Medicaid program by February 1, 2011. P. A. 09-3 appropriates $2. 5 million in FY 11 for this service.

Section 57 requires DSS, in collaboration with the Medicaid Managed Care Council and subject to available appropriations, prepare, an annual report concerning health care choices under the HUSKY Plan, Part A. DSS can comply with this requirement with minimal additional administrative costs.

Section 58 makes several changes concerning the Medicaid Managed Care Council. These changes have no associated fiscal impact.

Section 59 allows current participants in the food stamp employment and training program to continue to participate. As this change implements current practice, there is no anticipated impact.

Section 60 requires DSS to contract for the management of services for elderly and disabled Medicaid recipients. These individuals (approximately 100,000 are enrolled) currently receive health care on a fee-for-service basis, with a total annual cost (including long term care) of approximately $3 billion. P. A. 09-3 assumed savings of $52. 8 million in FY 10 and $155 million in FY 11 related to this change.

Section 61 clarifies that the current revenue sharing arrangement between the state and local education authorities is not affected by any enhanced Medicaid match that the state may receive from the federal government. As this change implements current practice, there is no associated impact.

Sections 62 and 63 require DSS to report to the General Assembly should it not submit any statutorily required federal Medicaid waivers. DSS can comply with this requirement with minimal additional administrative costs.

Section 64 further directs DSS to seek a Medicaid home and community based waiver for individuals with HIV/AIDS. P. A. 09-3 included additional appropriations of $1. 6 million in FY 10 and $4. 1 million in FY 11 for these services.

Section 65 delays the June, 2011 Medicaid HUSKY managed care organization payment until July, 2011. This results in a one-time savings of $68. 4 million in FY 11.

Section 66 increases the current cost sharing requirements under the Connecticut Home Care program. P. A. 09-3 assumed savings of $10. 9 million annually for this change.

Section 67 requires background checks for new hires for positions in DSS's disability determination services unit. This change is necessary to comply with new federal regulations.

Section 68 authorizes the Department of Children and Families (DCF) to access the federal Interstate Identification Index in circumstances involving the emergency placement of children. It also requires the DCF to request that the Department of Public Safety (DPS) conduct a state and national criminal history records check of any person residing in the home of a child placed on an emergency basis. No fiscal impact is anticipated, as this codifies current practice.

Section 69 brings Connecticut's law concerning the subsidized guardianship program into conformance with the federal Fostering Connections to Success and Increasing Adoptions Act of 2008. This will allow the state to commence claiming federal Title IV-E reimbursement (of 50%) for costs associated with newly enrolled eligible children. Revenues of approximately $600,000 in FY 10 are anticipated ($1. 2 million in FY 11, increasing over time to a maximum of approximately $4 million annually). Its provisions will minimally affect expenditures associated with the subsidized guardianship program.

Section 70 changes the effective date for ConnPACE II to October 1, 2009, and clarifies that the Medicare plans that ConnPACE recipients will be transferred to will have no asset limit. These changes do not alter the fiscal impact already assumed for this program.

Section 71 reduces the DSS pharmacy dispensing fee from $3. 15 to $2. 65. P. A. 09-3 assumed savings of $2. 1 million in FY 10 and $2. 3 million in FY 11 for this change.

Section 72 requires DSS, in consultation with the Connecticut Pharmacists Association, to review the impact of changes in the methodologies utilized in calculating the average wholesale price for brand name and generic drugs. Based on the outcome of such review DSS may, with the approval by the Secretary of the Office of Policy and Management, implement adjustments to payments made to licensed pharmacies to assist those pharmacies that experience financial hardship as a result of the implementation of changes in the methodologies. This provision is intended to maintain pharmacy reimbursement levels assumed in P. A. 09-3.

Section 73 allocates $300,000 of the FY 10 DSS appropriation to enhance the processing of pending eligibility applications for potential Medicaid recipients residing in nursing homes. As this section specifies how existing appropriations may be spent, there is no associated fiscal impact.

Section 74 allows DSS to establish a Medicaid per diem rate for intermediate care beds for mentally ill patients in general hospitals. As it is not known whether DSS would establish such a rate nor how such a rate would differ from current reimbursement mechanisms, the fiscal impact cannot be known.

Section 75 allows DSS to require the use of the Easy Breathing model in the HUSKY program. This requirement could result in additional programmatic costs, as well as potential preventative savings. The state could realize these impacts to the extent that these costs or savings effect future HUSKY MCO rate adjustments.

Section 76 allows DSS to establish a pilot Medicaid health management program at Oak Hill – the Connecticut Institute for the Blind. The fiscal impact of this change would be dependent upon the structure of the pilot, which is not specified in the bill.

Section 77 requires DSS to provide a rate increase for providers of adult day care services under the Connecticut Home Care program. P. A. 09-3 included an additional appropriation of $700,000 annually for this rate increase.

Section 79 makes technical changes to funding levels provided in P. A. 09-3 to properly align accounts. There is no fiscal or policy impact from these changes.

Sections 80 and 81 make changes to the reporting requirements concerning the Low-Income Energy Assistance block grant plan. There is no associated fiscal impact.

Section 82 changes the eligibility criteria for Operation Fuel. There is no associated fiscal impact.

Section 83 requires DSS to enter into contracts to 1) assist Medicare Part D clients with choosing the most appropriate Part D plan and 2) appeal denials of medically necessary prescriptions. P. A. 09-3 included an appropriation of $3. 5 annually under the Medicare Part D Supplemental Needs Fund account.

Sections 84 and 85 delay the implementation of the Long Term Care Reinvestment account. As such, $1. 9 million in FY 10 and $2. 1 million in FY 11 that otherwise would be deposited in this account will be credited to the General Fund. This provision is consistent with revenue assumptions in P. A. 09-3.

Section 86 changes the composition and responsibilities of the Nursing Home Financial Advisory Committee. The additional reporting requirements included for DSS will result in minimal additional administrative costs.

Section 87 delays the implementation of the Money-Follows-the-Person II program, consistent with P. A. 09-3.

Section 88 allows the Department of Economic and Community Development to increase the number of assisted living demonstration projects utilizing federal funding. There is no direct fiscal impact to the state due to this change.

Section 89 eliminates the Council on Medicare Part D implementation. There is no associated fiscal impact.

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. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.