This Fiscal Note is not an official copy and should not be quoted or cited.
This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0713 - Authorizes the application of negotiated trend factors for mental health services
COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO. 2872-01
BILL NO. SB 713
SUBJECT: Mental Health; Mental Health Department
TYPE: Original
DATE: January 26, 1998
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS Net Effect on All State Funds
FUND AFFECTED
FY 1999
FY 2000
FY 2001 General Revenue
$0
($6,869,582)
($7,268,018)
Total Estimated
$0
($6,869,582)
($7,268,018)
|
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Federal funds | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
|
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
| FUND AFFECTED | FY 1999 | FY 2000 | FY 2001 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 4 pages.
FISCAL ANALYSIS
ASSUMPTION
Officials from the Department of Mental Health (DMH) assumes this proposal would pertain only to the Purchase of Service Section and did not include any fiscal impact for the residential services as the contract authority is within the Community Placement Program under Section 630.660, RSMo. DMH assumes a trend factor of 3.2%. DMH states this percent is an average of the last three years of the Consumer Price Index of medical care developed by the U. S. Bureau of Labor Statistics. DMH further assumes that should inflation rise the cost would increase by an unknown amount. DMH reflects no cost impact in FY 99 due to the proposal becoming effective for FY 2000. DMH assumes the following projected FY 99 payments for services to vendors in determining the fiscal impact for this proposal:
Division
Alcohol and Drug Abuse $ 58,198,473
Comprehensive Psychiatric Services $ 62,855,335
Mental Retardation and Developmental Disabilities $ 93,620,622
Total $214,674,430
x 3.2% Trend Factor x 3.2%
Projected FY 2000 costs $ 6,869,582
Department of Social Services (DOS) officials state that DMH is responsible for the provision of mental health services for Medicaid clients and DOS - Division of Medical Services (DMS) is responsible for the cost-efficient reimbursement of mental health services for Medicaid clients and for ensuring the federal funds are utilized to the fullest extent. DOS states this is a double appropriation with DMH which means DMH is appropriated General Revenue funds while DOS - DMS is appropriated Federal funds for these services. DOS - DMS processes claims for services provided to Medicaid recipients and reimburses these privately-contracted providers for the full amount due to them. On a quarterly basis, DMH reimburses DOS - DMS for the state share of expenditures for services provided to Medicaid recipients. DOS states the mental health services in DMS's FY 99 budget is $236,417,231. DOS states that DMH has a 3.4% trend factor for providers of mental health services in DMH's FY 99 budget. DOS estimates a 3.4% increase would necessitate an $ 8 million increase in total of which $ 4.8 million is an increase in federal funds appropriation for DMS.
| FISCAL IMPACT - State Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| GENERAL REVENUE FUND | |||
| Costs - Department of Mental Health | |||
| Trend factor payments to vendors | $0 | ($6,869,582) | ($7,268,018) |
| Total Costs - Department of Mental Health | $0 | ($6,869,582) | ($7,268,018) |
|
ESTIMATED NET EFFECT ON | |||
| GENERAL REVENUE FUND | $0 | ($6,869,582) | ($7,268,018) |
| FEDERAL FUNDS | |||
| Income - Department of Social Services | |||
| Medicaid reimbursements | $0 | $4,842,200 | $5,036,000 |
| Total Income - Department of Social Services | $0 | $4,842,200 | $5,036,000 |
| Costs - Department of Social Services | |||
| Trend factor payments to vendors | $0 | ($4,842,200) | ($5,036,000) |
| Total Costs - Department of Social Services | $0 | ($4,842,200) | ($5,036,000) |
|
ESTIMATED NET EFFECT ON | |||
| FEDERAL FUNDS | $0 | $0 | $0 |
| FISCAL IMPACT - Local Government | FY 1999 | FY 2000 | FY 2001 |
| (10 Mo.) | |||
| $0 | $0 | $0 | |
| FISCAL IMPACT - Small Business | |||
Small businesses would be expected to be fiscally impact to the extent that they would incur increased revenues due to the trend factor requirements of this proposal.
DESCRIPTION
This proposal relates to payments for mental health services. The proposal would establish a negotiation process between providers and the Department of Mental Health. A single trend factor would be negotiated each year between the Department and affected providers. Trend factors would not exceed the consumer price index for medical care as developed by the U.S. Bureau of Labor Statistics.
DESCRIPTION (continued)
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 Mental Health
Department of Social Services
Jeanne Jarrett, CPA
Director
January 26, 1998