COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. No.: 2418-17
Bill No.: Truly Agreed To and Finally Passed CCS for HCS for SCS for SB 4, 1, 5, and 6
Subject: Elderly; Health Department; Health Care; Health, Public; Medicaid; Pharmacy; Social Services Department; Revenue Department
Type: Original
Date: September 21, 2001
FISCAL SUMMARY
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| General Revenue | ($575,124) | ($10,441,677 to Unknown) | $4,764,503 to (Unknown) |
| Missouri Seniors Rx | $3,185,430 | $0 | $0 |
| Total Estimated
Net Effect on All State Funds |
$2,610,306 | ($10,441,677 TO UNKNOWN)* | $4,764,503 TO (UNKNOWN)* |
*Unknown costs for additional "spenddown" clients.
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Federal | $0 | $0 | $0 |
| Total Estimated
Net Effect on All Federal Funds* |
$0 | $0 | $0 |
*Revenues and expenditures of $9 million annually would net to $0.
| FUND AFFECTED | FY 2002 | FY 2003 | FY 2004 |
| Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses.
This fiscal note contains 17 pages.
ASSUMPTION
Officials from the Office of State Treasurer, the Office of State Courts Administrator, and the Department of Revenue assume this proposal would not fiscally impact their agencies.
Officials from the Department of Social Services - Division of Family Services (DFS) state the following:
Income Expansion
The DFS would need to hire additional staff and develop policy to accommodate the necessary changes for the expansion of income to the adult Medicaid populations. Implementation of this portion of the proposal would begin January 1, 2002.
The proposal provides that the income eligibility limit be expanded to 100% of the Federal Poverty Level (FPL) for those individuals receiving old age assistance benefits or permanent and total disability benefits. Currently 100% of the FPL is $716 for a single individual and $968 for a couple.
Based on data from the FY 2000 DOS Annual Data Report published by Research and Evaluation there are 11,882 QMB cases, and 6,860 SLMB cases. This data is based on average persons receiving monthly for FY 2000 and should provide a more accurate count of individuals impacted.
This proposal would have a negligible fiscal impact on both the GR and SAB programs. The GR population may have a small percentage of cases that have income in the month of application greater than $181 (Need standard for a 1 person household) but less than or equal to the SSI maximum of $530. This is typically a result of terminated income from employment. Affect on eligibility would be limited to the month of application. SAB individuals rejected in the past on excessive resources usually qualify for the Blind Pension program since it has a $20,000 resource maximum.
The global Medicare population in Missouri is 800,000. Assume this group to be the new population from outside of the current welfare rolls to seek Medicaid benefits.
800,000 Medicare Population
520,000 Living Alone (65%)
280,000 Living with a Spouse (35%)
According to a study completed by the Public Policy Institute of AARP #9914 dated September ASSUMPTION (continued)
1999 entitled: "How Much Are Medicare Beneficiaries Paying Out-of-Pocket for Prescription Drugs?", 10% of Medicare beneficiaries have income less than or equal to 100% of the FPL. Based on this information, DFS anticipates that one out of 10 or 10% of the Medicare population would be eligible to apply for Medicaid under the new expanded income limits.
Annual salary for a Caseworker is $29,040. One-time equipment expense costs per FTE are $8,867 with ongoing expenses of $4,404 per FTE and travel costs of $225 annually per FTE.
The DFS assumes that the Division of Aging within the Department of Health and Senior Services would award an RFP to a third-party for the administration of the PIPS therefore its involvement would be negligible. No increases in Medicaid caseloads are anticipated.
The DFS assumes a zero fiscal impact for this portion of the proposal.
Officials from the Division of Medical Services (DMS) worked with the Division of Family Services to identify the population that is being proposed for full medical assistance. The population includes spenddown, Qualified Medicare Beneficiary (QMB) only, and Blind Pension eligibles. These populations are currently receiving a limited medical services benefit, but this proposal would allow the eligibles to receive the full benefit. Currently, there are 10,908 spenddown eligibles and 37 Blind Pension eligibles affected by increasing income limits. DMS believes there would be individuals that are eligible for the spenddown program, but are not enrolled. DMS assumed that this population might present themselves for medical coverage if this proposal would be adopted, but DMS is unable to estimate this population.
Spenddown - DMS assumed the 10,908 eligibles can be converted from spenddown status to "regular" Medicaid immediately. DMS also assumed a monthly cost of $77.02 (FY 01) which is
a weighted average of actual spenddown costs for spenddown eligibles as of August 2000. DMS assumed a 4% increase in medical cost each year and a caseload increase of 3.94% each year.
The DMS has only estimated costs for current "spend-down" clients who would become Medicaid eligible. Oversight assumes the DMS has excluded certain new cases coming into the Medicaid system, both cases eligible due to the increase in the income limit and additional "spend-down" cases, from their calculations. The number of new clients that would apply and be eligible could not be estimated by DMS or Oversight. Therefore, there is an unknown additional cost to Medicaid that is not included in this fiscal note.
Blind Pension - The current caseload for this population is 2,611. DFS assumed that 37 eligibles of this population would be eligible for the full Medicaid benefits with the proposal. Since the medical payments for this population is currently 100% General Revenue (GR) and since they do not receive the full Medicaid benefits, DMS assumed a reduction in GR and an increase in ASSUMPTION (continued)
federal funding for this population.
Claims Processing Cost - DMS estimates the claims processing costs associated with these eligibles at $50,000 per year. These costs are matched at the 50/50 GR/FF rate.
DMS further states a state plan amendment (SPA) would be required to expand the income limit to 80% of FPL on July 1, 2002, 90% of FPL on July 1, 2003, and 100% of FPL on July 1, 2004. DMS assumes 6 to 9 months would be required to submit the SPA and obtain approval from the Centers for Medicare and Medicaid Services (CMS). The Division of Medical Services worked with the Division of Family Services to determine the eligibles affected by expansion of the resource limits. According to the Division of Family Services, the following eligibles would be affected in FY 2002:
QMB/SLMB 7,301
New Cases 1,558
DMS assumes program (61.06% federal) and claims processing costs of $100,000 (50% GR, 50% Federal) annually would be as follows:
FY 2002 $0
FY 2003 $9,266,861
FY 2004 $13,399,436
Officials from the Department of Health and Senior Services - Division of Aging (DA) state:
In determining the fiscal impact of this proposal, DA has made the following assumptions:
- Department of Social Services, Division of Family Services (DFS) would calculate the fiscal impact associated with determining eligibility for under the new requirements;
- Department of Social Services, Division of Medical Services (DMS) would determine the fiscal impact associated with the cost of services for the new group of eligible recipients; and
- Department of Social Services, Division of Legal Services (DLS) would determine the fiscal impact associated with the cost of any administrative hearings.
According to the Department Of Social Services, Research and Evaluation Unit, there were 69,928 Medicaid recipients age 65 and over in FY2000. As of June 30, 2000 the DHSS had authorized in-home services to just over 20,363 Medicaid in-home service recipients age 65 or over. Therefore, the department estimates the participation rate for in-home services is 29.12% (20,363 / 69,928). Additionally, it is projected the client population would grow at a rate of 4% per year based upon the growth experienced in the Old Age Assistance (OAA) and Permanently and Totally Disabled (PTD) population as provided by the Division of Medical Services. The ASSUMPTION (continued)
Department of Health and Senior Services assumes that the spenddown clients and the Blind Pension (PB) clients who become eligible because of the increase in the income requirements who are currently receiving in-home services are already being case managed and, therefore, will not increase the number of potential eligibles.
Based on the 29.12% participation for in-home services, the department estimates 2,580 [(7,301 + 1,558) x 29.12%] additional Medicaid recipients will access home care as an alternative to facility placement and will require case management in fiscal year 2003; 2,683 (2,580 x 104.00%) clients will require case management in fiscal year 2004 and 2,791 (2,580 x 104.00% x 104.00%) clients will require case management in fiscal year 2005. The department will need thirty-two (32) additional Social Service Worker II (SSW) positions the first year (FY2003) to case manage the new Medicaid eligibles based on current average caseload size of 80 cases per
Social Service Worker (2,580 / 80 = 32.2500). The department will need thirty-four (34) SSW or two (2) additional SSW positions the second year (FY2004) (2,683 / 80 = 33.5375) and
thirty-five (35) SSW or one (1) additional SSW position the third year (FY2005) (2,791 / 80 = 34.8875). The department will also need four (4) Home and Community Services Area Supervisor positions based on current supervision levels of one supervisor for every nine Social Service Workers and four (4) Clerk Typist II positions to provide clerical support to the Area Supervisor and SSW staff. The department will add the supervisor and clerical support staff in the first year.
The Social Service Worker IIs will be placed in the following counties/locations:
Year 1 (FY2003) (32 workers) One worker to be located in each of the following counties: Christian, Taney, Cape Girardeau, Carter, Chariton, Pettis, Buchanan, Camden, Macon, Franklin and Jefferson. Greene, Jasper, Taney, Texas, Wright, Dunklin, New Madrid, Pemiscot, St. Francois, Scott, Stoddard, Cass, Jackson, Pettis, Saline, Vernon, Andrew, Clinton, Grundy, Livingston, Adair, Boone, Crawford, Marion, Phelps, Pike, Pulaski, Randolph, Jefferson, St. Charles, Prince Hall, and Wainwright.
Year 2 (FY2004) (34 workers or 2 additional workers). One worker each to be located in Cape Girardeau and Clay counties.
Year 3 (FY2005) (35 workers or 1 additional worker). Worker to be located in Scotland county.
One (1) Area Supervisor position and one (1) Clerk Typist II position will be placed as follows: one each in Taney, Cape Girardeau, Jackson and Macon counties.
Social Service Worker II duties: responsible for the investigation of hotlines, pre-long-term care screenings, the eligibility determination and authorization of state-funded in-home services.
ASSUMPTION (continued)
Home & Community Services Area Supervisor duties: supervise Social Service Workers responsible for the investigation of hotlines, pre-long-term care screenings, the eligibility determination and authorization of state-funded in-home services; provide oversight and accountability for the performance of the SSWs including case review, evaluation and guidance; act as the first point of contact for complaint resolution when clients are dissatisfied with services or staff performance.
Clerk Typist II duties: provide the necessary clerical support to the Area Supervisors, Social Service Workers, and the activities of the unit.
208.553 Establishes the Commission for the Missouri Senior RX Program
In determining the fiscal impact of this proposal, the Department of Health and Senior Services
has made the following assumptions: The commission shall hold approximately 10 meetings during the first year and quarterly meetings in future years; The commission members shall be reimbursed for ordinary and necessary expenses incurred in the performance of their duties but shall receive no compensation for services; and The DHSS would employ staff necessary to support the performance of the commission's duties.
The DHSS staff will oversee and evaluate the work of the third-party administrator, support the
commission, and perform program outreach with Area Agencies on Aging, public health clinics and other senior organizations. It is estimated the staff needed to perform these functions are a Public Health Manager (B2), two (2) Health Program Representative IIIs, a Research Analyst IV and two (2) Clerk Typist IIIs. These staff will be placed in Central Office.
Public Health Manager (B2) duties: responsible for program oversight and for supervising the health program representatives, research analyst and the clerk typist IIIs.
Health Program Representative IIIs duties: responsible for assisting with oversight of the third-party administrator; provide support to the commission; and assist with the development of program outreach materials.
Research Analyst IV duties: responsible for assisting with oversight of the third party administrator especially in areas of cost-control measures, fraud and abuse detection system and auditing programs; and provide support to the commission.
Clerk Typist IIIs duties: responsible for providing clerical support to the public health manager, the health program representatives and the research analyst staff and providing clerical support to the commission.
ASSUMPTION (continued)
208.556 Establishes the Missouri Senior Rx Program.
The DHSS is using assumptions provided by actuarial consultants with William M. Mercer as a model for the third-party administration of a Missouri Seniors Rx Program. The assumptions are as follows:
- Benefit Design
- Income Tier I Less than $12,000 for an individual and Less than $17,000 for a couple; Tier II $12,001 - $17,000 for an individual and $17,001 - $23,000 for a couple.
- Enrollment Fee $25 Tier I; $35 Tier II.
- Deductible of $250 Tier I; $500 Tier II.
- Annual Benefit Maximum of $5,000 (both Tier I and Tier II).
- Coinsurance of 40% (both Tier I and Tier II).
- Eligible Seniors 287,820 Tier I; 94,830 Tier II.
- Participants - FY03 -- 37,260 Tier I, 13,220 Tier II; FY04 - 57,310 Tier I, 20,330 Tier II.
- Coinsurance applies to generic and preferred-brand prescription drugs. Drugs not on the voluntary preferred drug list are not covered under the program.
- 10% of all prescription drug costs will not be covered on the voluntary preferred drug list.
- A mandatory generic substitution provision applies whereby the participant pays coinsurance on the generic drug price + the difference in cost between the preferred brand and
generic drug if a generic drug is available and the patient and/or the physician request that the preferred brand drug be dispensed.
- Medicaid eligibility will be increased to 100% of the Federal Poverty Level and the resource limit will be expanded by $500 (to $1500 individual/$2500 couple).
- Individuals who are enrolled in a prescription drug program with an actuarial value of equal or greater value as the Missouri Senior Rx Program are not eligible to enroll in the program.
- Coordination of Benefits will be enforced for individuals enrolled in both the State PIPS and a prescription drug program whose actuarial value is less than the State PIPS.
- Brand discount of AWP - 10.43% will be legislated.
- Generic discount of AWP - 20% will be legislated.
- Dispensing fee of $4.09 per prescription will be legislated.
- Rebates of 15% (of AWP) will be negotiated for brand name drugs. Note that there will be a lag of approximately 180 days for the State to receive the rebates.
- Rebates of 11% (of AWP) will be negotiated for generic drugs. Note that there will be a lag of approximately 180 days for the State to receive the rebates.
- Claims processing fees of $0.60 per prescription will be negotiated. This includes PEP type activities to be performed by the third party administrator..
- Administrative expenses of $5.7 million in FY2003 and $3.7 million in FY2004 will be incurred in addition to the claims processing fees listed above. This also assumes that the State ASSUMPTION (continued)
will have only one contractor to pay claims and perform utilization management and cost containment activities.
- A claim processing system that contains the capability to both process claims and administer pharmacy management programs will be used. Additional costs to enhance a claims processing system have been considered in this analysis (see next bullet for examples of these enhancements).
- Pharmacy management programs including edits, patient profiling, retrospective drug utilization review, prior authorization, dose optimization, case management and voluntary preferred drug list management will result in program savings of 5-7% (of the state's portion of program costs net of discounts, rebates and member cost sharing.)
- Mail service will not be included in the program.
- An enrollment fee of $25-$35 per year will be charged based on income level and will not apply towards the deductible.
- Proprietary prescription drug expenditure data for calendar year 1999 for over 1 million Medicare beneficiaries in Medicare+Choice HMOs, employer-sponsored retiree plans, Medigap Plans H-J, Medicaid programs and state pharmacy assistance programs was utilized to project program costs.
The following annual cost and utilization trends were utilized to project prescription drug expenditure data from calendar year 1999 to fiscal years 2003 and 2004:
2000 / 1999 - 19%
2001 / 2000 - 19%
2002 / 2001 - 18%
2003 / 2002 - 17%
2004 / 2003 - 16%
The enrollment fees and the rebates will be revenue deposited into the Missouri Seniors Rx Fund. The cost for the administrator and other program costs are shown as PIPS Fund to the extent that revenues will support the expenses with the remainder of the costs shown as General Revenue.
Based on statewide guidelines and previous experience, the following amounts represent the average annual expense of an FTE:
Rent (Statewide Average) - $2,700 per FTE ($13.50 per sq. ft. x 200 sq. ft.);
Utilities - $320 per FTE ($1.60 per sq. ft. x 200 sq. ft.);
Janitorial/Trash - $200 per FTE ($1.00 per sq. ft. x 200 sq. ft.);
Travel and Other Expenses - $5,000 per FTE for professional staff;
Office and Communication Expenses - $4,800 per FTE for all staff.
ASSUMPTION (continued)
In addition to the above standard costs, systems furniture for the new HCS staff in Taney, Texas, Wright, Dunklin, New Madrid, Pemiscot, St. Francois, Stoddard, Cass, Jackson, Pettis, Andrew, Boone, Crawford, Pulaski and Macon counties and Prince Hall in St. Louis City in FY2003; Cape Girardeau and Clay counties in FY2004; and Scotland county in FY2005; and for the Commission for the Missouri Senior Rx Program staff in Jefferson City in FY2002 will be needed at a cost of $4,500 per FTE. Desks will be needed for all HCS staff in locations without systems furniture.
Desktop PCs with software will be needed for the forty-three (43) HCS field staff and the six (6) PIPS Commission staff at a cost of $2,300 each.
FY02 costs for the PIPS Commission meetings and staff are based on the period January 1, 2002 through June 30, 2002. FY03 costs for the for the Area Supervisor, the Clerk Typist and Social
Service Worker positions are based on the period July 1, 2002 through June 30, 2003. FY03 and
FY04 costs include a 3.0% inflation adjustment for expense & equipment costs and a 2.5% inflation adjustment for personal services.
According to the proposal the clearinghouse would be operated by a third-party administrator which would be a quasi-public agency. DOH assumes that the Missouri Patient Care Review Foundation operating the CLAIM program could be utilized as a model for estimating the costs.
DOH estimates a need for additional staff: one Health Program Representative III to coordinate and evaluate the functions and customer services of the third-party administrator of the clearinghouse and one Clerk Typist III to provide clerical support.
Oversight assumes the following based on census data from the United States Bureau of Census and studies from the United States Department of Health and Human Services. Oversight assumes that there would be a seventy-five percent participation rate among income eligible participants age 65 and over who do not have any pharmaceutical insurance coverage.
Total Households 65 and over 21,745 US (IN THOUSANDS)
Missouri Individuals
Missouri Households 65 and over 525,811 Households (x 1.34)
Under $2,500 263 1.21% 6,360 8,522
$2,500 to $4,999 303 1.39% 7,327 9,818
$5,000 to $7,499 1,202 5.53% 29,065 38,947
$7,500 to 9,999 1,625 7.47% 39,294 52,654
ASSUMPTION (continued)
$10,000 to $12,499 1,786 8.21% 43,187 57,870
$12,500 to $14,999 1,525 7.01% 36,876 49,413
$15,000 to $17,499 1,457 6.70% 35,231 47,210
$17,500 to $19,999 1,322 6.08% 31,967 42,836
$20,000 to $22,499 1,240 5.70% 29,984 40,179
$22,500 to $24,999 1,206 5.55% 29,162 39,077
Total 11,929 54.86% 288,452 386,526
Individuals Participation Prescription
w/o Insurance Rate Individuals Couples Costs per
47.00% 75.00% 43.00% 57.00% Person
4,005 3,004 1,292 1,712 1,335
4,614 3,461 1,488 1,973 1,335
18,305 13,729 5,903 7,826 1,335
24,747 18,560 7,981 10,579 1,335
27,199 20,399 8,772 11,628 1,335
23,224 17,418 7,490 9,928 1,335
22,189 16,642 7,156 9,486 1,335
20,133 15,100 6,493 8,607 1,335
18,884 14,163 6,090 8,073 1,335
18,366 13,775 5,923 7,852 1,335
181,667 136,251 58,588 77,663
Costs
Per Less Coinsurance State
Individual Deductible 40.00% Cost
1,724,406 322,923 560,594 840,890
1,986,674 372,036 645,855 968,782
7,881,128 1,475,867 2,562,104 3,843,157
10,654,603 1,995,244 3,463,744 5,195,615
11,710,228 2,192,927 3,806,921 5,710,381
9,998,935 3,744,919 2,501,606 3,752,409
9,553,081 3,577,933 2,390,059 3,585,089
53,509,054 13,681,848 15,930,882 23,896,324
ASSUMPTION (continued)
Costs
Per Less Coinsurance State
Couple Deductible 40.00% Cost
4,571,682 856,120 1,486,225 2,229,337
5,266,995 986,329 1,712,267 2,568.400
20,894,152 3,912,763 6,792,556 10,188,834
28,247,086 5,289,717 9,182,948 13,774,422
31,045,721 5,813,805 10,092,766 15,139,149
26,508,804 4,964,196 8,617,843 12,926,765
25,326,772 4,742,841 8,233,572 12,350,359
22,980,091 8,606,776 5,749,326 8,623,989
21,554,700 8,072,921 5,392,711 8,089,067
20,963,684 7,851,567 5,244,847 7,867,270
77,034,267 51,097,034 62,505,062 93,757,592
Oversight assumes program costs of $142,445,978 annually. Oversight assumes enrollment fees of $3,335,430 annually and pharmaceutical rebates of $42,022,455 annually.
Officials from the Office of Administration - Division of Budget and Planning (BAP) state
this proposal would eliminate the senior pharmacy tax credit beginning with calendar year 2002.
Removing the credit would increase General Revenue by $94.5 million in FY03 and $99.2
million in FY04. A 5% growth rate is assumed. This is based on actual data for FY01 of $85.7 million.
In addition, BAP states the enrollment fee for the pharmacy investment program for seniors would increase total state revenue. Department of Health and Senior Services should be providing information about the enrollment fee, as well as the costs of the pharmacy investment program for seniors.
| FISCAL IMPACT - State Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| GENERAL REVENUE FUND | |||
| Savings - Office of Administration | |||
| Repeal of prescription tax credit | $0 | $94,500,000 | $99,200,000 |
| Transfer Out - Office of Administration | |||
| To Missouri Senior Rx Fund | $0 | ($99,600,972) | ($87,449,145) |
| Costs - Department of Social Services - Division of Family Services | |||
| Personal services (2.01) | ($29,185) | ($59,830) | ($61,325) |
| Fringe benefits | ($9,727) | ($19,941) | ($20,440) |
| Expense and equipment | ($22,475) | ($9,583) | ($9,871) |
| Total Costs - DFS | ($61,387) | ($89,354) | ($91,636) |
| Costs - Department of Social Services - Division of Medical Services | |||
| Processing costs - federal poverty | $0 | ($25,000) | ($25,000) |
| Program costs - federal poverty | $0 | ($3,443,651 to Unknown) | ($5,041,372 to Unknown) |
| Total Costs - DMS | $0 | ($3,468,651 to Unknown) | ($5,066,372 to Unknown) |
| Costs - Department of Health and Senior Services - Division of Aging | |||
| Personal services (33.3 FTE) | ($121,239) | ($1,175,462) | ($1,204,849) |
| Fringe benefits | ($40,409) | ($391,781) | ($401,576) |
| Expense and equipment | ($352,089) | ($215,457) | ($221,919) |
| Total Costs - Division of Aging | ($513,737) | ($1,782,700) | ($1,828,344) |
| ESTIMATED NET EFFECT ON GENERAL REVENUE FUND |
($575,124) |
($10,441,677 TO UNKNOWN)* |
$4,764,503 TO (UNKNOWN)* |
| *Unknown costs for additional "spenddown" clients. | |||
| MISSOURI SENIORS Rx FUND | |||
| Income - Department of Health and Senior Services - Division of Aging | |||
| Enrollment fees | $3,335,430 | $3,335,430 | $3,335,430 |
| Pharmaceutical rebates | $0 | $22,447,756 | $51,661,403 |
| Total Income - Division of Aging | $3,335,430 | $25,783,186 | $54,996,833 |
| Transfer In - Office of Administration | |||
| From General Revenue Fund | $0 | $99,600,972 | $87,931,032 |
| Costs - Department of Health and Senior Services - Division of Aging | |||
| Personal Services (2 FTE) | $0 | ($65,382) | ($67,017) |
| Fringe Benefits | $0 | ($21,792) | ($22,337) |
| Equip. & Expenses | $0 | ($28,842) | $0 |
| Data Collection & Reporting | $0 | ($72,100) | ($74,263) |
| Professional Services (Consultants) | ($150,000) | ($309,000) | ($318,270) |
| Program administration | $0 | ($7,233,126) | ($5,967,435) |
| Drug Costs | $0 | ($117,653,916) | ($136,478,543) |
| Total Costs - Division of Aging | $0 | ($125,384,158) | ($142,927,865) |
| ESTIMATED NET EFFECT ON MISSOURI SENIORS Rx FUND |
$3,185,430 |
$0 |
$0 |
| FEDERAL FUNDS | |||
| Income - Department of Social Services | |||
| Medicaid reimbursements | $442,419 | $6,726,829 to Unknown | $9,228,752 to Unknown |
| Costs - Department of Social Services - Division of Family Services | |||
| Personal services (.99) | ($14,375) | ($29,468) | ($30,205) |
| Fringe benefits | ($4,791) | ($9,822) | ($10,067) |
| Expense and equipment | ($11,070) | ($4,720) | ($4,862) |
| Total Costs - DFS | ($30,236) | ($44,010) | ($45,134) |
| Costs - Department of Social Services - Division of Medical Services | |||
| Processing costs | $0 | ($50,000) | ($50,000) |
| Program costs | $0 | ($5,823,210 to Unknown) | ($8,358,064 to Unknown) |
| Total Costs - DMS | $0 | ($5,873,210 to Unknown) | ($8,408,064 to Unknown) |
| Costs - Department of Health and Senior Services - Division of Aging | |||
| Personal services (14.7 FTE) | ($248,063) | ($508,529) | ($521,242) |
| Fringe benefits | ($82,679) | ($169,493) | ($173,730) |
| Expense and equipment | ($81,441) | ($131,587) | ($80,582) |
| Total Costs - Division of Aging | ($412,183) | ($809,609) | ($775,554) |
| ESTIMATED NET EFFECT ON FEDERAL FUNDS |
$0 |
$0 |
$0 |
| FISCAL IMPACT - Local Government | FY 2002
(10 Mo.) |
FY 2003 | FY 2004 |
| $0 | $0 | $0 |
FISCAL IMPACT - Small Business
Small pharmacies may be impacted by this proposal
DESCRIPTION
This proposal would create the Missouri Senior Rx Program to provide pharmaceutical assistance for seniors. The current tax credit, under Section 135.095, would sunset as of December 31, 2001. A three-year increase in Medicaid income limits would be phased in. As of July 1, 2002, the income limits would be phased in at 90 percent; at 95 percent in 2003; and at 100 percent in 2004. The Department may apply for federal waivers (Sections 208.151).
The Commission for the Missouri Senior Rx Program would be established, consisting of fifteen members. Members would serve staggered terms and may be reappointed. The Commission would establish guidelines and procedures for the Missouri Senior Rx Program. The Commission would have flexibility to redefine certain terms, such as "generic drugs" (Sections 208.550 - 208.553).
The Missouri Senior Rx Program would be established within the Division of Aging. The Commission must solicit requests for proposal from private contractors for administration of the Program. The coverage of certain drugs would be prohibited. Eligible individuals must be:
DESCRIPTION (continued)
- Sixty-five or older without access to health insurance with a pharmacy benefit for at least six months prior to application (except for retirees);
- With household income at or below $12,000 for individuals and $17,000 for couples; or
- With household income between $12,001 and $17,000 for individuals and between $17,001 and $23,000 for couples.
The Commission may restrict income eligibility and must set and adjust coinsurance, deductibles, and enrollment fees at different amounts as cost control measures.
Medicaid participants would not be eligible for this Program. This Program would be a payer of last resort and would not be an entitlement. If a senior carries coverage through another plan,
then the senior may only receive certain benefits after meeting the deductible. Applicants must apply annually with certain proof provided. Participants would pay a forty percent coinsurance. Total annual expenditures for each participant may not exceed $5,000. The following minimum deductibles and enrollment fees apply for the initial year:
- Individual with income at or below $12,000 would pay a $250 deductible and a $25 enrollment fee;
- Couples with income at or below $17,000 would pay a $250 deductible and a $25 enrollment fee per person;
- Individual with income between $12,001 and $17,000 would pay a $500 deductible and a $35 enrollment fee;
- Couples with income between $17,001 and $23,000 would pay a $500 deductible and a $35 enrollment fee.
The Commission would submit quarterly reports to the General Assembly, the Governor, and the Division. If program costs exceed funds, then the Commission may implement cost control measures. If a federal program is established, the state program would cover additional costs only (Section 208.556).
The Program would be operational by July 1, 2002. Open enrollment would be April 1 - May 30, 2002. As of 2004, open enrollment would be held January 1 through February 28th . Other enrollment periods may apply for some (Section 208.559).
Generic drugs would be used when available, unless requested otherwise. Pharmacists in the DESCRIPTION (continued)
Program would be reimbursed at specific levels based on whether the drug is generic or brand (Section 208.562).
The Division would negotiate with manufacturers for participation in the program. Certificates would be issued to participating pharmacists and would be in effect for at least one year and may be automatically renewed. Cancellation would be with sixty days notice. The Division would negotiate the amount of rebates annually. Rebates for all drugs would be fifteen percent of the average manufacturers' price. All rebates would be used toward refunding the program. A pharmaceutical manufacturer's refusal to participate would not affect its Medicaid status. A prohibition on drug formulary restrictions is included. False information and confidentiality provisions are also included (Section 208.565).
The "Missouri Senior Rx Fund" would be established to receive all moneys received by the Program (Section 208.568).
The "Missouri Senior Rx Clearinghouse" would be established within the Commission. The Commission would submit requests for proposal for the private administration of the Clearinghouse. This may be the same administrator of the Program. The Clearinghouse would be a public or private agency created to assist and educate Missouri residents in accessing prescription drugs and serve as a pharmaceutical benefit resource. Purposes include providing one- stop shopping for information, targeting outreach, maintain a toll-free phone number, and provide data to the state regarding the program (Section 208.568).
This proposal contains an emergency clause. This proposal would be reauthorized every four years.
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
Office of Attorney General
Office of State Courts Administrator
Department of Health and Senior Services
Department of Revenue
Department of Social Services
Office of State Treasurer
Jeanne Jarrett, CPA
Director
September 21, 2001