This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0533 - Stops Premature Discharge of Mothers & Infants From Hospital
L.R. NO. 1896-09
BILL NO. HCS SCS SB 533, 512 and 581
SUBJECT: Children, Health, Insurance-Medical
TYPE: Original
DATE: April 23, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
All State Funds $0 to $0 to $0 to
($624,028) ($748,834) ($748,834)
General Revenue $0 to $0 to $0 to
($1,749,788) ($3,860,431) ($3,996,021)
Insurance
Dedicated $40,500 $0 $0
Total Estimated
Net Effect on All $0 to $0 to $0 to
State Funds ($2,333,316) ($4,609,265) ($4,744,855)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Federal $0 to $0 to $0 to
($2,630,156) ($5,805,144) ($6,009,038)
Total Estimated
Net Effect on All $0 to $0 to $0 to
Federal Funds ($2,630,156) ($5,805,144) ($6,009,038)
ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Local Government $0 $0 $0
FISCAL ANALYSIS
ASSUMPTION
The Department of Insurance(INS) stated it will need .5 FTE, an Insurance
Product Analyst II, and related expense to review all new life and health
form filings caused by changes to insurance policies and plans generated by
this and all other legislation enacted during this session. This FTE would
work full-time for six months a year. INS states that approximately 245
insurers and 25 HMOs are currently writing medical plans. On average each
company offers three plans. The result would be 810 new policy filings needed
to comply with this legislation. A policy filing fee of $50 is required and
based on 810 filings, $40,500 in revenue to the Insurance Dedicated Fund
would be generated in the first fiscal year only.
Oversight assumes the passage of this proposal would not increase cost to
INS; however, revenue of $40,500 in the first fiscal year only would be
realized. In addition, passage of more than one similar proposal could
require the INS to request increased appropriations to cover cumulative
administrative costs.
Officials from the Missouri Consolidated Health Care Plan (HCP) reported that
the proposal would have the effect of increasing the total number of annual
hospital days for delivery of babies by 259.3 days. The current average stay
for a vaginal delivery would increase from 1.9 days to 2 days. The current
average for a caesarean section birth would increase from 3.2 days to 4 days
under this proposal. Based on an average daily cost for mother and child of
$671.60 the range of increased cost would be $112,896 to $748, 834. Using
the mid-estimate of births and impact results in a cost of $174,146. The
actual cost would be based on the number of births in a fiscal year. These
increased cost may be reflected in higher premium cost beginning in January,
1997.
Officials from the Department of Social Services (DOS) stated that this
proposal would increase the hospital stay for many Medicaid clients. The DOS
Medicaid program pays for 40% of all births in Missouri each year. In fiscal
year 1995 that was 26,556 births. The proposal will have two impacts on cost:
the additional cost per birth due to increased hospitalization and additional
cost due to managed care savings that will not be realized. The current
average stay for a Medicaid vaginal delivery would increase from 1 day to 2
days. The current average for a caesarean section birth would increase from
2.7 days to 4 days under this proposal. The increase in cost was based on an
average daily cost of $558 for a vaginal birth and $491 for a caesarean
section birth. For fiscal year 1998 the cost due to increased hospital days
is $5,888,862 while the loss in managed care savings is $3,776,713.
Officials from the Department of Corrections (DOC) reported their would be a
small amount of additional compensatory time required for correction's
officers to supervise the hospital stay of inmates giving birth. DOC has
estimated the cost to be $4,502 in fiscal year 1997 and $8,899 and $9,122 in
fiscal years 1998 and 1999 respectively.
Oversight assumes the passage of this proposal would not increase cost to
DOC. However, passage of more than one similar proposal could require the DOC
to request increased appropriations to cover cumulative administrative costs.
Officials from the Department of Highway and Transportation (DHT) reported an
estimated increase in cost of $212,500 to the medical plan. DHT assumes these
additional cost will be paid by participants or the plan and therefore there
will be no fiscal impact on DHT.
The Department of Conservation, Department of Health, Department of Public
Safety- Missouri State Highway Patrol and the Office of Administration stated
the proposal would have no fiscal impact on their agency.
At a hearing of the Oversight Subcommittee held February 5, 1996 the
Subcommittee determined that the Fiscal Note for HB 1069 from the 88th
General Assembly, Second Regular Session, be revised as follows:
1) the Department of Social Services response be reflected as a range from
zero to the cost of 100% of all mothers and newborns receiving Medicaid
remaining in a hospital for a minimum of two or four days.
2) the maximum cost estimated by the Consolidated Health Care Plan of
$748,834 be reflected in the top range of the estimated fiscal impact.
FISCAL IMPACT - State Government FY 1997 FY 1998 FY 1999
(10 Mo.)
GENERAL REVENUE FUND
Cost-Department of Social Services
Increased Medicaid Payments $0 to $0 to $0 to
($1,749,788) ($3,860,431) ($3,996,021)
Estimated Net Effect on General $0 to $0 to $0 to
Revenue Fund ($1,749,788) ($3,860,431) ($3,996,021)
ALL STATE FUNDS
Cost - Consolidated Health Care Plan
Increased Health Care Cost $0 to $0 to $0 to
($624,028) ($748,834) ($748,834)
Estimated Net Effect on All State $0 to $0 to $0 to
Funds ($624,028) ($748,834) ($748,834)
INSURANCE DEDICATED FUND
Income - Department of Insurance
Policy Filing Fees $40,500 $0 $0
Estimated Net Effect on Insurance $40,500 $0 $0
Dedicated Fund
FEDERAL FUNDS
Cost-Department of Social Services
Increased Medicaid Payments $0 to $0 to $0 to
($2,630,156) ($5,805,144) ($6,009,038)
Estimated Net Effect on Federal Funds $0 to $0 to $0 to
($2,630,156) ($5,805,144) ($6,009,038)
FISCAL IMPACT - Local Government FY 1997 FY 1998 FY 1999
(10 Mo.)
$0 $0 $0
DESCRIPTION
This substitute requires health insurers and similar entities (insurers) to
cover inpatient care for the mother and child for 48 hours following a
vaginal delivery and 96 hours following a cesarean section. The coverage is
only required if the policy covers maternity benefits. The time period can be
shortened by the attending physician after consulting with the mother. The
attending physician is required to use criteria contained in the "Guidelines
for Perinatal Care" prepared by the American Academy of Pediatrics and the
American College of Obstetricians and Gynecologists to determine whether the
time period should be shortened. If the period is shortened, the insurer is
required to cover two visits, one of which must be a home visit, by a
registered professional nurse who is experienced in maternal and child health
nursing. Insurers are prohibited from encouraging the mother or her attending
physician to shorten the minimum time period. Insurers are required to
notify insureds of the coverage required by the bill. Notification is
required by the mailing of the yearly informational packet.
This legislation is not federally mandated, would not duplicate any other
program and would not require additional capital improvements or rental
space.
SOURCES OF INFORMATION
Department of Highway and Transportation
Department of Corrections
Department of Conservation
Department of Health
Office of Administration
Department of Public Safety
Department of Insurance
Consolidated Health Care Plan
Department of Social Services