Date Requested: February 26, 2015
Time Requested: 10:01 AM
Agency: Health and Human Resources, Department of
CBD Number: Version: Bill Number: Resolution Number:
3031 Introduced SB567
CBD Subject: Human Services


FUND(S):

0403/8722

Sources of Revenue:

General Fund,Other Fund Federal

Legislation creates:

Neither Program nor Fund



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The purpose of this bill is to require legislative approval of the expansion of Medicaid Managed Care and to provide that the Joint Committee on Government and Finance conduct performance evaluation and actuarial audit of the Medicaid managed care program and each of its contracted vendors. Preliminary estimates for the fiscal impact of implementation of this legislation for SFY16 indicate a loss of potential net savings that would have been realized if additional Medicaid populations had shifted to managed care effective 7/1/15 of approximately $101.1M (state share $24M/federal share $77.1 using SFY16 blended FMAP).
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 101,100,000 101,100,000
Personal Services 0 0 0
Current Expenses 0 101,100,000 101,100,000
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0


Explanation of above estimates (including long-range effect):


    The legislation if implemented would delay the movement of additional Medicaid enrollment categories into managed care, which would result in the loss of potential savings that could have been realized from serving those members through managed care.
    A preliminary evaluation of the potential savings of moving various populations currently receiving Medicaid coverage through a fee-for-service model into managed care was prepared by the Bureau's consultant that also prepares the MCO rates annually (the populations included were institutionalized (e.g. Nursing Home) populations, Dual-Eligible (i.e. Medicaid members that also have Medicare coverage), SSI populations, foster care children, TANF and other Medicaid populations not currently in managed care, as well as the Medicaid Adult Expansion population resulting from the Affordable Care Act). The savings do not include operational issues with transitioning these populations or any associated rebalancing of care settings, and would be subject to further evaluation, clarification and refinement as specific issues related to this type of change are identified and resolved. Claims data from SFY13 (fee-for-service and encounter data) was utilized in preparing the estimates, and trended forward to SFY16 using current trend experience. The analysis excludes supplemental payments that may be associated with fee-for-service or encounter data such as Upper Payment Limit (UPL), Disproportionate Share Payments (DSH), and Graduate Medical Education (GME). For Dual-Eligible populations only Medicaid costs are included, and Medicare costs have been excluded from the estimate. Additional administrative costs specific to the Bureau will likely be incurred as a result of this change however they are unknown at this time and not included in the estimated savings above.
    The state/federal split was calculated by applying the blended SFY16 FMAP of 71.4% federal/28.6% state to all categories above except for Medicaid Adult Expansion, for which the applicable FMAP for SFY16 is 100% federal. In addition to the above, the legislation requires that the Bureau reimburse the Joint Committee on Government and Finance for the cost of the audit; it is not known at this time what the cost of that engagement would be therefore that has not been included in the estimate above.
    



Memorandum


    



    Person submitting Fiscal Note: Karen L. Bowling
    Email Address: karen.l.bowling@wv.gov