SB 0445 - Fiscal Note

Fiscal Note - SB 0445 - Requires hearing screenings for infants

COMMITTEE ON LEGISLATIVE RESEARCH

OVERSIGHT DIVISION

FISCAL NOTE

L.R. NO. 1945-01

BILL NO. SB 445

SUBJECT: Children

TYPE: Original

DATE: February 23, 1999

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FISCAL SUMMARY

ESTIMATED NET EFFECT ON STATE FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
General Revenue	($164,144 to Unknown)	($178,686 to Unknown)	($410,288)
Insurance Dedicated Fund	$14,450 to $28,900	$0	$0
Highway Fund	$0	$0	($41,177)
Total Estimated Net Effect on All State Funds	($135,244 to Unknown)	($178,686 to Unknown)	($451,465)

ESTIMATED NET EFFECT ON FEDERAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Federal	(Unknown)	(Unknown)	($311,109)
Total Estimated Net Effect on All Federal Funds	(Unknown)	(Unknown)	($311,109)

ESTIMATED NET EFFECT ON LOCAL FUNDS
FUND AFFECTED	FY 2000	FY 2001	FY 2002
Local Government	$0	$0	$0

Numbers within parentheses: ( ) indicate costs or losses

This fiscal note contains 7 pages.

FISCAL ANALYSIS

ASSUMPTION

The Department of Conservation assumes this proposal would not fiscally impact their agency.

The Department of Mental Health and Department of Corrections did not respond to our fiscal impact request. However, in their responses to a similar proposal, both agencies assumed the proposal would not fiscally impact them.

The Department of Transportation (DHT) states that by requiring health insurance providers to cover the cost of the hearing loss screening, there would be a fiscal impact on the Highway and Patrol medical plan. Based on data from 1998, 164 infants were added to DHT's medical plan. According to Westport Benefits, costs for an auditory brainstem response screening are $340, and costs for an otoacoustic emissions screening are $41. Assuming that 50% of the newborns tested were using each type of screening, the estimated cost to the medical plan would be $28,118, including a 10% copayment. Assuming an effective date of January 1, 2002, this proposal would not impact DHT's medical plan until FY2002.

The Missouri Consolidated Health Care Plan (HCP) did not respond to our fiscal impact request. However, in their response to a similar proposal, HCP stated that current HMO and POS contracts would require them to absorb the additional cost of the screenings. The plans may shift this cost to HCP through increased premiums under any contract renewal. Consequently, there would be some modest increase in cost, but that cannot be determined. HCP also stated that the indemnity plan also does not currently include this cost. However, since the indemnity plan covers very few HCP members, those enrolled in the indemnity contract would be minimally affected.

The Department of Social Services, Division of Medical Services (DMS) states the cost of a hearing screening is $34.21. The Department of Health assumes there will be 74,000 births in Missouri in FY2002, and 52.5% of these births will be for Medicaid eligibles. Based on this, DMS assumes a full year cost to Medicaid would be $1,329,059. Due to the effective date of this proposal and the expected lag in billing, DMS assumes only four months of billings would be received in FY2002 for a cost of $443,020.

DMS also assumes the cost of the hearing screening would be billed by a provider that is not employed by the hospital. If the hearing screening is done by the hospital, the cost would be included in the hospital's cost report, which would be passed onto Medicaid in future years through the cost settlement process. DMS notes that additional screenings would probably be done prior to the effective date of this proposal since these types of screenings are allowable by ASSUMPTION (continued)

Medicaid, but DMS is unable to estimate these costs.

The Department of Insurance (INS) states that approximately 259 health insurers and 30 HMO's have policies filed with INS. Each insurer may submit one or two policy form amendments (one for individual and one for group or one filing for both) to comply with the requirements of this proposal. Form filings are to be accompanied with a $50 filing fee. Based on the estimated range of new policy filings, INS estimates $14,450 to $28,900 in new revenue would be generated for the Insurance Dedicated Fund in the first fiscal year only. INS anticipates that current appropriations and staff would be able to absorb the work duties in this proposal. However, INS states that if additional proposals are approved, they may need to request an increase in appropriations due to the combined effect of multiple proposals.

The Department of Public Safety, Missouri State Highway Patrol (MSHP) states there were 93 infants born into MSHP's insurance plan last year. According to Westport Benefits, costs for an auditory brainstem response screening are $340, and costs for an otoacoustic emissions screening are $41. Assuming that 50% of the newborns tested are using each type of screening, the estimated cost to the medical plan would be $15,945, including a 10% copayment. This fiscal impact would begin in FY2002 and would be split between General Revenue (8.44%), Highway Funds (81.9%), Air Pollution Control (.25%), Criminal Record System Fund (1.01%), Gaming Fund (5.04%) and Federal Fund (3.36%). Oversight will show costs to the Highway Fund and General Revenue, and will assume minimal costs on the other funds.

The Department of Elementary and Secondary Education (DES) assume the incidence of children with hearing loss sufficient to be eligible who are not otherwise identified to be .02%. Assuming that there are 75,000 live births per year, there would be 150 births of children who are hearing impaired. Annual cost for evaluation are $500 per evaluation or $37,500, with a portion of these costs attributed to general revenue and federal funds. Assuming 40 of the children evaluated will require therapy, therapy costs are $2,500 per therapy or $100,000. DES assumes an annual increase of infants of 50% and an inflation rate of 10%. DES also assumes there would be costs associated with developing and maintaining the reporting system described in the proposal. DES estimates total costs related to this proposal at $93,750 in FY02, $233,125 in FY03, and $407,062 in FY04.

The Department of Health (DOH) states that those facilities or persons who currently provide hearing screening to newborns prior to January 1, 2002, are to report the results to the Department of Health. In addition, this proposal requires DOH to provide audiological and administrative technical support to facilities implementing a hearing screening program. DOH will develop a training program for individuals administering screening procedures, and develop and distribute educational materials for families. There are approximately 90 hospitals in the ASSUMPTION (continued)

state that deliver and/or have a neonatal intensive care unit that would require training. Costs associated with training include materials, travel, lodging, and meals.

DOH assumes this proposal would require 4 FTE, including a Health Program Representative III, an Audiologist, a Clerk Typist III, and a Research Analyst III. The Health Program Representative and Audiologist would be responsible for developing and supplying educational material on universal newborn hearing screenings, obtaining hearing screen results data from the hospitals and agencies that rescreened the infants, providing audiological and administrative technical support to facilities in selecting screening equipment, and developing and training individuals administering tests. The Research Analyst would assist in the development of a surveillance system, collect and enter data, assist in the development of reporting forms, and write reports based on the data; and the Clerk Typist would provide support for the staff. Expenses related to these FTE include equipment, office furniture, personal computers, travel, rent, and office and communication expenses.

Oversight assumes a Clerk Typist would not be needed for the support of 3 FTE. Oversight further assumes additional staff could be located in existing office space, and rent expense would not be needed.

DOH also states they are required to establish a Newborn Hearing Screening Advisory Committee. This committee is required to meet at least four times a year. DOH assumes there would be costs associated with this committee, including travel, lodging, and meal expenses.

DOH assumes the additional FTE would need to be hired or contracted immediately to work with those hospitals that currently provide hearing screens, collect data, and develop and implement program requirements.

FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
GENERAL REVENUE
Costs - Department of Health
Personal Service	($68,051)	($83,736)	($85,829)
Fringe Benefits	($20,340)	($25,029)	($25,654)
Expense and Equipment	($75,753)	($69,921)	($71,798)
Total costs - DOH	($164,144)	($178,686)	($183,281)
FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
Costs - Department of Elementary
and Secondary Education
Testing, therapy, and costs for
developing and maintaining reporting system	$0	$0	($50,712)
Costs - Missouri State Highway Patrol
Increased premiums	$0	$0	($1,346)
Costs - Department of Social Services
Division of Medical Services
Increased Medicaid costs	(Unknown)	(Unknown)	($174,949)
ESTIMATED NET EFFECT	($164,144 to	($178,686 to
ON GENERAL REVENUE	Unknown)	Unknown)	($410,288)
INSURANCE DEDICATED FUND
Income - Department of Insurance
Filing fees	$14,450	$0	$0
	to $28,900
ESTIMATED NET EFFECT ON	$14,450
INSURANCE DEDICATED FUND	to $28,900	$0	$0
HIGHWAY FUND
Costs - Department of Transportation
Increased premiums	$0	$0	($28,118)
Costs - Missouri State Highway Patrol
Increased premiums	$0	$0	($13,059)
ESTIMATED NET EFFECT
ON HIGHWAY FUNDS	$0	$0	($41,177)
FISCAL IMPACT - State Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
FEDERAL FUNDS
Costs - Department of Social Services
Division of Medical Services
Increased Medicaid costs	(Unknown)	(Unknown)	($268,071)
Costs - Department of Elementary
and Secondary Education
Testing, therapy, and costs for
developing and maintaining reporting system	$0	$0	($43,038)
ESTIMATED NET EFFECT
ON FEDERAL FUNDS	(Unknown)	(Unknown)	($311,109)
FISCAL IMPACT - Local Government	FY 2000	FY 2001	FY 2002
	(10 Mo.)
	$0	$0	$0
FISCAL IMPACT - Small Business
This proposal may fiscally impact small businesses as it may result in increased medical insurance costs.

DESCRIPTION

This proposal requires hearing screenings for infants. After January 1, 2002, every infant born in a Missouri ambulatory surgical center or hospital, before being released, must be given a screening for hearing loss. If an infant is born in any other location, a hearing screening should be given within 3 months of birth. Test results will be reported to parents and the Department of Health. Anyone providing a hearing screening before January 1, 2002 should also report the results to the Department. This requirement will not apply to persons citing religious reasons.

The physician should provide educational materials to the parents of infants with hearing loss and the Department should provide equipment and technical support to all facilities implementing this program.

DESCRIPTION (continued)

The Department should monitor and refer infants found to have hearing loss to the contact person with the First Steps Program within the Department of Elementary and Secondary Education. Such information will be confidential, with exceptions. This proposal also establishes the "Newborn Hearing Screening Advisory Committee". All insurance companies specified in the proposal will be required to provide coverage for newborn hearing screening, rescreenings, and audiological assessment and amplification. Coverage should also be provided for newborns who are eligible for medical assistance or the children's health program.

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 Health

Department of Social Services

Department of Insurance

Department of Conservation

Department of Transportation

Department of Public Safety

Missouri State Highway Patrol

Department of Elementary and Secondary Education

NOT RESPONDING: Department of Mental Health, Department of Corrections, and Missouri Consolidated Health Care Plan

Jeanne Jarrett, CPA

Director

February 23, 1999