This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0581 - Stops Premature Discharge of Mothers & Infants From Hospital
L.R. NO. 2221-01
BILL NO. SB 581
SUBJECT: Child, Health, Insurance, Insurance Medical
TYPE: Original
DATE: January 9, 1996
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
General Revenue ($1,749,788) ($3,860,431) ($3,996,021)
Total Estimated
Net Effect on All
State Funds ($1,749,788) ($3,860,431) ($3,996,021)
ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED FY 1997 FY 1998 FY 1999
Federal ($2,630,156) ($5,805,144) ($6,009,038)
Total Estimated
Net Effect on All
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) states 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 revenue or
cost to INS; however, 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) stated that
this 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.
Oversight assumes the passage of this proposal would not increase cost to
HCP. HCP currently has contracts with health plans that allow an increase in
premium no higher than the increase in the medical component of the Consumer
Price Index. Cost to HCP due to this proposal could increase if contracts
are renegotiated and the limit on premium increases is eliminated.
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.
The Department of Corrections, Department of Conservation, Department of
Health, Department of Highway and Transportation, Department of Public
Safety-Missouri State Highway Patrol, and the Office of Administration
stated the proposal will have no fiscal impact on their agency.
FISCAL IMPACT-State Government FY 1997 FY 1998 FY 1999
(10 Months)
GENERAL REVENUE FUND
Cost-Department of Social Services
Increased Medicaid Payments ($1,749,788) ($3,860,431) ($3,996,021)
Total Cost to Department ($1,749,788) ($3,860,431) ($3,996,021)
Estimated Net Effect on General
Revenue Fund ($1,749,788) ($3,860,431) ($3,996,021)
FEDERAL FUNDS
Cost-Department of Social Services
Increased Medicaid Payments ($2,630,156) ($5,805,144) ($6,009,038)
Total Cost to Department ($2,630,156) ($5,805,144) ($6,009,038)
Estimated Net Effect
on Federal Funds ($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 act mandates that managed care plans must provide coverage for a
minimum of forty-eight hours of in-patient care following a vaginal delivery
and a minimum of ninety-six hours of in-patient care following a caesarean
section for a mother and her newly born child. If a mother and her
attending physician agree to let the mother and newborn leave before the
minimum coverage the managed care plan must cover a follow-up visit within
forty-eight hours after in-patient discharge. This act is similar to SB 512
and SB 533.
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 Public Safety
Department of Insurance
Department of Health
Department of Social Services
Office of Administration
Missouri Consolidated Health Care Plan