Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200




OFA Fiscal Note

State Impact:

Agency Affected


Various State Agencies

GF - Implements the Budget

Municipal Impact: None


Please note that the Medicaid figures below reflect the gross impact of the proposed policy changes. HB 6704, AAC Expenditures and Revenue for the Biennium Ending June 30, 2015, as passed by the House and the Senate, net appropriated the Medicaid account.

Sections 1 through 69, 151 and 157 implement the transfer of various housing programs from the Department of Economic and Community Development, the Department of Social Services (DSS), and the Office of Policy and Management (OPM) to the Department of Housing (DOH) contained in HB 6704. HB 6704 transfers 13 positions and $57,419,292 in FY 14 and $60,138,493 in FY 15 to the DOH.  There are no associated costs or savings from these transfers.

The bill also transfers the state's Rental Assistance Program from DSS to DOH.  However, it should be noted that HB 6704 maintains funding of $47,103,992 in FY 14 and $52,128,500 in FY 15 associated with the Rental Assistance Program in DSS.

In addition, the bill requires the Commissioner of Housing to submit an annual report to the General Assembly regarding the Rental Assistance Program.  There is no fiscal impact to this provision.

The bill also restricts the Renters' Rebate Program to individuals who received a grant for the calendar year 2011. HB 6704 reduces the Renters' Rebate Program by $2,028,781 in FY 14 and $3,843,774 in FY 15 to reflect the elimination of funding for new applicants.

Finally, the bill adds the Commissioner of Housing to various task forces, boards and councils pertaining to housing.  There may be a cost of less than $1,000 to DOH for mileage expenses.

Section 70 implements the Department of Rehabilitation Services (DORS) savings in HB 6704 from eliminating the partial reimbursement to towns for costs associated with teachers for visually impaired students. Municipalities can employ DORS teachers for the visually impaired at no cost to towns. This results in a reduction of $1.1 million in FY 14 and FY 15 in the DORS Educational Aid for Blind and Visually Handicapped Children account.

Sections 71 and 72 implement statutory changes to the definition of a child necessary for the Department of Children and Families (DCF) to secure $7 million in additional General Fund revenue, pursuant to the Federal Fostering Connections to Success and Increasing Adoptions Act of 2008. This Act created an option for states to extend eligibility for Title IV-E reimbursable foster care services to children over the age of 18, up to age 21. This revenue amount is included in HB 6704.

Section 73 allows the DSS to rebase residential care home rates based on changes in the facility's costs. Current statute freezes residential care home rates and therefore precludes the DSS from achieving savings when a facility's costs are decreased which otherwise result in a reduced reimbursement rate. HB 6704 appropriates $458,333 in FY 14 and $500,000 in FY 15 for residential care home rate adjustments.

Sections 74 and 75 requires the DSS to freeze nursing home and intermediary care facilities for the Mental retarded (ICF/MR's) statutory rate increases in both years of the biennium. HB 6704 includes savings of $54.8 million in FY 14 and $83.8 million in FY 15 for this change.

Section 76 requires DSS to modify The method of reimbursing hospitals for Medicaid services, which is not anticipated to change the DSS' aggregate hospital expenditures.

Section 76 also includes the implementation of Medicaid co-payment for nonemergency use of hospital emergency room services. HB 6704 includes savings of $675,000 in both FY 14 and FY 15 from this co-payment.

Section 77 establishes a Medicaid supplemental payment for low cost hospitals. HB 6704 appropriates $15 million in both FY 14 and FY 15 for these hospitals.

Sections 77 through 79 eliminate transitional supplemental payments related to the conversion from managed care to an administrative services organization (ASO). HB 6704 includes savings of $23.5 million in FY 14 and FY 15 from this provision.

Section 80 makes the following changes to the DSS: 1) reduces the facility per diem hospice rate, and 2) eliminates interpreter and chiropractic services as covered benefits. HB 6704 includes savings of approximately $9.5 million in FY 14 and $10.3 million in FY 15 for these changes.

Section 81 eliminates the higher Medicaid reimbursement rate for independent pharmacies. HB 6704 includes savings of $1.1 million in both FY 14 and FY 15 from this change.

Sections 82 through 84 redefine the current income limits for the Medicare Savings programs. There is no fiscal impact for this provision as this redefinition does not change the monetary level of the limits.

Section 85 clarifies DSS' practices concerning authorization for customized wheelchairs. There is no fiscal impact.

Sections 86 through 101, 119, 120 and 158 remove statutory references to the Charter Oak and ConnPACE programs. HB 6704 eliminates funding reflected in Section 158 (repealers) for these programs as it is assumed that individuals will receive benefits under the Health Insurance Exchange after January 1, 2014.

Section 102 establishes a submittal and approval process for the Medicaid Coverage for Lowest Income Populations (MCLIP) program. There is no fiscal impact.

Section 103 and 105 through 107 make various technical changes that have no fiscal impact.

Section 104 expands the scope of the False Claims Act statute beyond Medicaid fraud. HB 6704 appropriates $378,406 in FY 14 and $399,205 in FY 15 and five positions in the Office of the Attorney General to assist in achieving budgeted fraud savings of $65.5 million in FY 14 and $103.4 million in FY 15.

Section 108 expands the duties of the long-term care ombudsman beginning July 1, 2014. One position and funding of $26,600 in FY 15 is included in HB 6704 to implement this change.

Section 109 makes technical changes and allows the DORS to charge a fee related to the Connecticut Tech Act Project which is anticipated to result in nominal revenue to the agency.

Section 110 does not result in a fiscal impact. This requires DCF to publish an independent cost analysis of the full implementation of the Fostering Connections to Success and Increasing Adoption Act of 2008 on its website and report the results of such analysis to the Human Services Committee and the Committee on Children.

Section 111 directs DSS to provide Medicaid therapy management services in two, two–year pilot programs. HB 6704 includes savings of $2.8 million and $14.8 million related to these programs.

Section 112 removes statute allowing certain modes of nonemergency transportation. This has no fiscal impact as it codifies current practice.

Section 113 allows the DSS Commissioner to require certain notifications, which has no fiscal impact.

Section 114 allows regulatory changes to conform to the Affordable Care Act, which has no fiscal impact.

Section 115 allows the Department of Correction (DOC), with support from the Departments of Mental Health and Addiction Services and Public Health, to initiate an 18 month pilot treatment program for drug therapies at certain facilities. This has no fiscal impact as it conforms to current practice.

Section 116 requires DSS to divert revenue for the purposes of maximizing supplemental payments to certain hospitals. HB 6704 does not include a revenue gain associated with this potential additional federal revenue.

Section 117 changes the timing of medical assistance disproportionate share payments to certain hospitals from monthly to quarterly. This has no fiscal impact as it codifies current practice.

Section 118 eliminates the requirement that DSS consult with OPM in certain circumstances, which has no fiscal impact.

Section 121 amends membership on a task force. There is no fiscal impact.

Section 122 allows DSS to carry out certain policies while in the process of adopting regulations. There is no fiscal impact.

Section 123 requires DSS to maximize potential federal revenue related to the Healthy Start program. Should these efforts be successful, there is a potential revenue gain to the General Fund.

Section 124 requires DCF to provide full-time coordinators to increase the academic achievement of children and youth in Hartford, Bridgeport and New Haven who are living in the care and custody of DCF or who are being served by the Court Support Services Division.  This “Raise the Grade Pilot” is required to begin July 1, 2013 and its operation is limited to two years. Therefore contract costs incurred by the agency (estimated at approximately $100,000 per city, per year) would be limited to FY 14 and FY 15. HB 6704 appropriates $300,000 in both FY 14 and FY 15 for this purpose.

Section 125 does not result in a fiscal impact to DCF, Court Support Services Division (CSSD) or to the State Department of Education (SDE). It requires DCF to annually track the academic progress of each child and youth in state custody through 12th grade, annually submit a report to the Achievement Gap Task Force, include educational status information in reports to the Juvenile Court and develop a plan with CSSD to be finalized by July 1, 2014 and submitted to the Achievement Gap Task Force. It also requires CSSD, in collaboration with SDE, to create an annual study on the academic progress of youth in its custody and to have case plans that describe the educational needs and grade-level performance of youth in its secure facilities. Case plans shall also identify what supports or services will or are being provided to support academic performance.

Section 126 allows DSS to distribute funding to community health centers/federally qualified health centers (FQHC's) based on cost reports. HB 6704 appropriates $10 million in both FY 14 and FY 15 for rate increases for FQHC's.

Section 127 establishes a pharmacy step therapy for the Medicaid program. HB 6704 includes a savings of approximately $11.8 million in FY 14 and $15.8 million in FY 15 for this program.

Sections 128 through 131 could result in a cost to DSS associated with individuals attaining Medicaid eligibility sooner due to exempting life insurance policies with cash values of less than $10,000. Currently, to be eligible for Medicaid long term care services, an applicant cannot have more than $1,600 in liquid assets. Liquid assets include the cash value of most insurance policies. Eligibility is not granted until the policy is surrendered and the proceeds are spent and the $1,600 liquid asset threshold is reached.

It is not known how many of the approximately 10,800 long term care applications granted annually are delayed due to the existence of a life insurance policy with a cash value less than $10,000. Medicaid pays an average of approximately $5,740 per person, per month for nursing home care.

These sections have several measures that allow nursing homes to seek restitution when assets are improperly transferred and a resident is therefore ineligible for Medicaid. As this concerns transactions between private entities and individuals, there is no state fiscal impact.

Sections 132 through 139 and 159 create a new tattoo technician licensure category that is anticipated to result in a net state cost of approximately $108,278 in FY 14 and $256,442 in FY 15. DPH will incur costs of $127,644 in FY 14 and $237,770 in FY 15 related to additional staffing and support costs. The Office of the State Comptroller (OSC) will incur fringe benefits costs of $40,635 in FY 14 and $78,672 in FY 15 related to additional DPH staff. Potential annual General Fund revenue of approximately $60,000 from DPH for license fees, less than $1,250 from the Judicial Department for fines for failure to obtain a license and potential municipal revenue gain to the extent that tattoo establishments are inspected by local directors of health and owners are charged a fee of up to $100 per inspection, will offset DPH and OSC costs. HB 6704 appropriates funding of $168,278 in FY 14 and $316,442 in FY 15 to establish tattoo technician licensure in Connecticut.

Section 140 increases online license renewal fees by $5 for physicians, surgeons, nurses, nurse midwives and dentists and requires, instead of allowing, all of these professions (except nurse midwives) to renew their licenses online. HB 6704 includes net General Fund revenue gain, after accounting for costs for online transactions (approximately 2%), of $73,200 in FY 14 and $97,500 in FY 15. In addition, HB 6704, includes savings to DPH of $8,600 and $30,200 from averted bank processing fees and postage costs.

Section 141 establishes fees for home health care agencies of $300, satellite patient service offices of $100 and assisted living service agencies of $500, all of which are already licensed by DPH, resulting in a General Fund revenue gain of approximately $36,600 in both FY 14 and FY 15. It also expands the fee for DPH technical assistance. Any technical assistance provided on a project costing $1 million or less remains at the existing fee of $565. For projects costing more than $1 million, the fee is of 1% of the total project cost. It is estimated that this will result in approximately $10,000 in additional General Fund revenue annually.

Section 142 does not result in a fiscal impact to DPH. It requires the agency to establish and administer a program to provide financial assistance to community health centers (CHCs) within available appropriations, which it currently does through funding provided in its Community Health Services account. This section also requires DPH to develop a formula to disburse funds to CHCs and report this formula on or before October 1, 2013 to the Public Health and Appropriations Committees for approval/denial/or modifications, if any, to the proposed formula. The development of this formula is currently in progress.

Section 143 allows for administrative support expenses to be included in the OPM's determination of the state childhood immunization program appropriation, which is provided to the Department of Insurance for its annual health and welfare fee assessment of domestic health insurance entities. Three administrative positions and associated funding of $140,041 in FY 14 and $152,196 in FY 15 are included in HB 6704 to support the expansion of the state childhood immunization program under the FY 13 Revised Budget. With this change, these administrative costs will be offset by increased General Fund revenue from the assessment.

Section 144 requires DPH, in consultation with OPM, to develop not later than October 1, 2013, and thereafter implement annually, a reconciliation and expenditure projection process related to the state's childhood immunization budget. This is not anticipated to result in a fiscal impact to either agency.

Section 145 requires DPH's Office of Health Care Access (OHCA) to consider an applicant's provision of services to Medicaid recipients when considering certificate of need applications and does not result in a fiscal impact.

Section 146 allows OPM, at the request of the Chief Medical Examiner, to waive a $150 cremation fee resulting in a potential minimal General Fund revenue loss. While it is unknown how many such fees will be waived in FY 14 and FY 15, it is anticipated that the associated revenue loss would be less than $1,000 annually.

Section 147 allows the University of Connecticut Health Center (UCHC) to discontinue its neonatal intensive care unit (NICU) transportation service if such services are provided by another qualified service. HB 6704 includes savings of $420,391 in both FY 14 and FY 15 related to a reduction in UCHC emergency transportation services. This will help enable UCHC to reach these savings.

Section 148 does not result in a fiscal impact to DPH. It requires nonprofit hospitals to provide OHCA with their most recent Internal Revenue Service form 990, a community health needs assessment and a “detailed” patient bill.

Section 149 does not result in a fiscal impact to DPH from the elimination of a prohibition under CGS Sec. 19a-653 that restricted OHCA from imposing a civil penalty on any health care facility or provider that failed to complete an inventory questionnaire. It is not anticipated that OHCA will ultimately impose such penalties. To date, no civil penalty permitted by CGS Sec. 19a-653 has been assessed by OHCA.

Section 150 requires hospitals to provide a detailed patient bill upon request. There is no fiscal impact.

Section 152 details disbursements from the Tobacco and Health Trust fund for the FY 14 / FY 15 biennium.

Section 153 changes reporting requirements for certain nursing home facilities that receive state funding. There is no fiscal impact.

Section 154 requires the Department of Education to establish a pilot program and seek private and/or federal government funds to support the pilot.  If the pilot program is implemented revenue gain to certain local and regional school districts is anticipated and is associated with grant-in-aids for participating high schools. There is no state fiscal impact.

Section 155 makes a technical change that has no fiscal impact.

Section 156 requires DCF to perform screenings of certain children for referral to the Birth to Three program in the Department of Developmental Services (DDS). The expansion of DCF screenings of children served by the differential response program in FY 16 could result in a potential cost to the Birth to Three program in the out years.

There is no fiscal impact to DCF from requiring screenings for developmental and social-emotional delays, using an assessment tool such as the Ages and Stages Questionnaire, of children 36 months of age or younger. On and after 10/1/13, children in this age cohort who have been substantiated as a victim of abuse or neglect shall be screened twice annually for developmental and social-emotional delays. On and after 7/1/15, children in this age cohort who are being served by DCF's differential response program shall be screened at least once.

DCF is required to refer all children exhibiting developmental or social-emotional delays pursuant to such screenings to the Birth to Three program. Screening using an assessment tool such as the Ages and Stages Questionnaire for developmental and social-emotional delays is a component of an existing Memorandum of Understanding (MOU) between DDS and DCF. Specifying that such screening occur twice annually is not anticipated to increase referrals to the Birth to Three program beyond levels anticipated under the MOU. Currently, DCF refers any child who is not found eligible for services under the Birth to Three program to the Help Me Grow prevention program of the Children's Trust Fund or a similar program which the department deems appropriate.

Section 157 eliminates the HIV/AIDS waiver, which has not been implemented. HB 6704 includes savings of $1.3 million in FY 14 and $2. 2 million in FY 15 related to this change.

Section 158 repeals various sections of statute which result in the following fiscal impacts: 1) CGS section 17b-491 which established the CONNPACE program is repealed and results in a savings of $162,000 in FY 14 and $340,900 in FY 15; 2) CGS section 17b-311 which established the Charter Oak Health Program is repealed and results in a savings of $3.7 million in FY 14 and approximately $7.0 million savings in FY 15; and 3) CGS section 17b-261n repeals the Medicaid for Low Income Adults Wavier which does not result in a fiscal impact. The other sections of statute are repealed as they relate to the eliminated programs. These savings are reflected in HB 6704.

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. 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.