OFFICE OF FISCAL ANALYSIS

Legislative Office Building, Room 5200

Hartford, CT 06106 (860) 240-0200

http: //www. cga. ct. gov/ofa

EMERGENCY CERTIFICATION

SB-1240

AN ACT CONCERNING THE BUREAU OF REHABILITATIVE SERVICES AND IMPLEMENTATION OF PROVISIONS OF THE BUDGET CONCERNING HUMAN SERVICES AND PUBLIC HEALTH.

OFA Fiscal Note

State Impact: See Below

Municipal Impact: See Below

Explanation

Sections 1 through 69 and 178 establish the Bureau of Rehabilitative Services (BRS). Funding and positions for BRS are appropriated in PA 11-6 (AAC the Budget for the Biennium Ending June 30, 2013, and Other Provisions Relating to Revenue). BRS is in the Department of Social Services (DSS) for administrative purposes only. The positions, functions and funding of the following agencies and programs are transferred into BRS as follows:

Agencies & Programs Transferred to the

Bureau of Rehabilitative Services

Agency/Program

(Fund)

Positions

FY 12

FY 13

Board of Education Services for the Blind (GF)

91

$11. 8 million

$11. 6 million

Commission on the Deaf and Hearing Impaired(GF)

5

$618,147

$608,708

DSS- Rehabilitation Services (GF)

5

$9. 4 million

$9. 4 million

Total General Fund (GF)

101

$21. 8 million

$21. 6 million

Worker's Compensation Commission – Rehabilitative Services (WC)

6

$2. 1 million

$2. 1 million

Department of Motor Vehicles – Handicapped Driver Training (TF)

2

$130,710

$130,710

Sections 70 through 72 clarify that the state has lien rights (a more efficient and less costly process) to recover the costs of state aid and state humane care. As a result, it is anticipated that the Department of Administrative Services (DAS) may be able to collect additional potential revenue of $1. 0 million per year.

Sections 73 through 75 specify that the Department of Social Services (DSS) shall not apply the statutory Medicaid adjustment methodology for the biennium for nursing homes, ICF/MR's and Residential Care Homes. PA 11-6 reflects savings of $70. 3 million in FY 12 and $98. 4 million in FY 13 for these provisions.

These sections also allow DSS to adjust the nursing home rates and ICF/MR rates to pass through revenue received for the adjustments in the provider taxes included in PA 11-6. PA 11-6 appropriates an additional $59. 9 million in FY 12 and $70. 7 million in FY 13 for these adjustments.

Section 73 also suspends Medicaid nursing home fair rent adjustments for the biennium. PA 11-6 reflects savings of $2 million in FY 12 and $4 million in FY 13 for this provision.

Section 74 also allows DSS to provide a fair rent adjustment to ICF/MR's that have already received a certificate of need (CON) approval. This change is expected to cost $150,000 annually.

Section 75 also allows DSS to provide a fair rent adjustment to residential care homes that have already received a CON approval. PA 11-6 appropriates an additional $250,000 in FY 13 for this provision.

Section 76 reduces the dispensing fee under DSS pharmaceutical programs from $2. 90 to $2. 00. The section also reduces the reimbursement for drugs from Average Wholesale Price (AWP) less 14% to AWP less 16%. PA 11-6 reflects savings of $64. 8 million in FY 12 and $71. 2 million in FY 13 from reductions in pharmaceutical reimbursements.

Sections 77 and 78 suspend cost of living increases under the Temporary Family Assistance (TFA), State Administered General Assistance (SAGA), and state supplement cash assistance programs. PA 11-6 reflects savings of $4. 8 million in FY 12 and $9. 3 million in FY 13 for this provision.

Section 78 and 79 reduce the Medicaid personal needs allowance from $69 per month to $60 per month, and eliminate the annual inflation adjustment. PA 11-6 reflects savings of $1. 9 million in FY 12 and $2. 1 million in FY 13 for this provision.

Section 80 reduces premium assistance to Charter Oak Health Plan recipients enrolled as of May 31, 2010 and continues the policy that any enrollees to the program after that date receive no premium assistance. This section also specifies that in order to be eligible for the Charter Oak program, an individual must be ineligible for the high risk pool established under Patient Protection and Affordable Care Act (PPACA). PA 11-6 reflects savings of $12 million in FY 12 and $17. 3 million in FY 13 for this provision.

Section 81 limits the provision of Medicaid non-emergency dental services for adults. PA 11-6 reflects savings of $9. 8 million in FY 12 and $10. 3 million in FY 13 for this provision.

Section 82 specifies that DSS shall not apply the current statutory adjustment methodology for the biennium for boarding homes. PA 11-6 reflects savings of $4. 9 million in FY 12 and $8. 6 million in FY 13 for this provision.

Section 83 requires DSS to report to the General Assembly concerning its regulation development process. There is no fiscal impact.

Section 84 allows DSS to cap the Medicaid crossover payments to emergency transportation providers who serve dually eligible Medicare clients. PA 11-6 reflects savings of $3. 5 million annually for the restructuring of Medicaid transportation rates.

Section 85 delays the implementation of foreign language interpreting services as a covered Medicaid benefit until July 1, 2013. PA 11-6 reflects savings of $6 million annually for this provision.

Section 85 also re-establishes podiatry as an optional service under the Medicaid program. This provision is anticipated to cost $150,000 annually.

Section 86 increases the co-payments under the state funded Connecticut Home Care program from 6% to 7%. PA 11-6 reflects savings of $600,000 in FY 12 and $626,400 in FY 13 for this provision.

Section 87 makes a technical change to section 47 of PA 11-6 that does not result in a fiscal impact.

Section 88 through 91, 142 and 178 eliminate the ConnPACE program for individuals eligible for Medicare. PA 11-6 reflects savings of $4. 4 million in FY 12 and $4. 1 million in FY 13 as a result of this provision. The program remains open for those individuals awaiting a Medicare eligibility determination, at an annual cost of approximately $125,000.

Section 92 allows DSS to establish a fee schedule for outpatient hospital services. PA 11-6 reflects a savings of $1. 1 million in FY 12 and $2. 4 million in FY 13 for this provision.

Section 93 reduces the number of individuals served by the HIV/AIDS waiver from 100 to 50. PA 11-6 reflects a savings of $700,000 in FY 12 and $2. 2 million in FY 13 for this provision.

Section 94 reduces vision services for adults under Medicaid from one pair of eyeglasses every year to no more than one pair of eyeglasses every two years. The current benefit will continue to be provided for all children under the age of 21 under the HUSKY A program. PA 11-6 reflects savings of $825,000 in FY 12 and $950,000 in FY 13 for this provision.

Section 95 limits the small house nursing home program to one project and caps the number of nursing home beds at 280. PA 11-6 reflects savings of $750,000 in FY 13 for this provision.

Section 96 modifies the security deposit guarantee program. PA 11-6 reflects savings of $228,850 in FY 12 and $249,605 in FY 13 for these provisions.

Sections 97 through 101 transfer the administration of the child day care program and supplemental quality enhancement grant program from DSS to the State Department of Education (SDE). PA 11-6 reflects the transfer of $17. 5 million in FY 12 and FY 13 for school readiness funding.

Sections 102 and 103 modify the hospital user fee passed as part of PA 11-6 in order to align the policy with the savings assumed in the budget. The net impact of the hospital user fee, associated federal revenue, and appropriations is a gain of $149. 4 million annually for the General Fund.

Section 104 makes changes to the provisions regarding the transfer of assets for the purposes of Medicaid eligibility, which have no fiscal impact as this conforms to current practice.

Section 105 makes changes to provisions concerning school-based child health services to comply with federal requirements. This change will ensure continued federal reimbursement for these services.

Sections 106 and 107 expand smoking cessation treatment coverage under Medicaid. PA 11-6 provides for $2. 75 million in FY 12 and $3. 4 million in FY 13 from the resources of the Tobacco Health Trust Fund to cover the net cost of these provisions.

Section 107 also clarifies that pharmacies can bill the state Medicaid program for diabetic testing supplies using the durable medical equipment fee schedule. As this clarifies current practice, there is no fiscal impact.

Section 108 makes changes to the provisions for reporting any changes under the State-funded Nutrition Assistance Program (SNAP), which has no fiscal impact.

Section 109 removes HUSKY B premium increases as established in section 22 of PA 10-179, and instead allows DSS to increase premiums based on the Consumer Price Index (CPI). This provision conforms to federal requirements.

Section 110 allows DSS to establish medical homes and carry out certain provisions of PPACA prior to adopting regulations. The fiscal impact will be dependent upon the structure and implementation of the medical home model.

Section 111 allows DSS to make interim monthly Disproportionate Share Hospital (DSH) payments. This provision codifies federal requirements and ensures that federal reimbursement for these services is continued.

Sections 112 through 115 allow DSS to establish hospital, home health, and provider rates to ensure that conversion to an administrative service organization (ASO) is cost neutral and maintains patient access. PA 11-6 reflects savings of $39. 8 million in FY 12 and $83. 3 million in FY 13 for the conversion of the HUSKY and Medicaid fee-for-service programs to an ASO model.

Section 115 also requires the ASO contract to have a provision to reduce inappropriate hospital emergency department usage. PA 11-6 reflects savings of $4. 4 million in FY 12 and FY 13 for this provision.

Section 116 allows DSS to establish an alternative benefits package or limit rates to providers of the Medicaid low-income adult population. PA 11-6 reflects total savings in DSS and DMHAS in the amount of $5 million in FY 12 and $10 million in FY 13 for these provisions.

Section 117 allows DSS, DOC, and DMHAS to establish a nursing home for certain clients. The fiscal impact is dependent on the structure of the system, which is not defined by the bill.

Sections 118 and 119 eliminate medical assistance to legal noncitizens who have been in the country for less than five years. PA 11-6 reflects savings of $9. 3 million in FY 12 and $9. 75 million in FY 13 for these provisions.

Sections 116, 120 through 141 remove references to State Administered General Assistance (SAGA) medical assistance, which no longer exists due to the conversion to Medicaid for low-income adults. There is no fiscal impact.

Section 143 requires DSS to contract with a pharmacy organization to provide Medicaid therapy management services. PA 11-6 reflects savings of $14. 14 million in FY 12 and FY 13 for this provision.

Section 144 modifies the procedures that DSS must follow when submitting certain Medicaid state plan amendments to legislative committees for approval. There is no fiscal impact.

Sections 145 and 146 delay the implementation of the Department on Aging until July 1, 2013. PA 11-6 reflects savings of $441,522 in FY 12 and $432,202 in FY 13 for these provisions.

Sections 147 and 148 result in a savings of $1. 6 million in FY 12 and $3. 2 million in FY 13 in the Department of Developmental Services' (DDS) Early Intervention account, which funds the Birth-to-Three Program. These savings are reflected in PA 11-6.

The savings to DDS are the result of making the following two insurance changes:

1. Eliminate co-payments and deductibles for Birth-to-Three services, and

2. Raise the annual cap on insurance payments from $6,400 per year to $50,000 per year for children with autism spectrum disorder receiving Birth-to-Three services.

The additional insurance revenue generated from these changes will reduce the level of appropriation required to fund the Birth-to-Three Program.

Impact to the State Employee Health Plan and Municipalities

As of July 1, 2010, the State Employees' Health Plan went self insured. Pursuant to current federal law, the state's self-insured plan would be exempt from state health insurance benefit mandates. However, in previous self-funded arrangements the state has traditionally adopted all state mandates. To the extent that the state continues this practice of voluntary mandate adoption the following impact would be anticipated.

Sections 83-84 will result in an increased cost to the state employee health plan of at least $75,000 in FY 12 and at least $150,000 in FY 13 as a result of the two changes to insurance referenced above. The state employee health plan currently charges standard plan co-pays for covered individuals for Birth-to-Three services. In addition, the state employee health plan, in conformance with current law, has an annual maximum policy benefit of $6,400 per child receiving Birth-to-Three services. The provisions expand the annual maximum policy benefit for children with autism spectrum disorder to $50,000. This is a $43,600 increase in the annual maximum policy benefit (a $130,800 increase in the aggregate maximum policy benefit for the three years of services). The cost would depend on the utilization of services, the level of which is indeterminate at this time.

These sections may also increase costs to fully insured municipal plans which currently require co-pays or other cost-sharing for Birth-to-Three services. In addition, there may be an increased cost to fully insured municipalities who do not provide the level of coverage specified in the bill for services for children with autism. The coverage requirements may result in increased premium costs when municipalities enter into new health coverage contracts after January 1, 2012. Due to federal law, municipalities with self-insured health plans are exempt from state health insurance benefit mandates.

The state and many municipal health plans are recognized as “grandfathered” health plans under PPACA1. It is unclear what effect the adoption of certain health mandates will have on the grandfathered status of the state plan and certain municipal plans PPACA2.

Section 149 increases, from $1. 5 million to $1. 9 million, as of July 1, 2011, the amount of lottery revenue that must be dedicated annually to the Chronic Gamblers Treatment Rehabilitation Account within the Department of Mental Health and Addiction Services. This results in a $400,000 revenue loss to the General Fund and a commensurate revenue gain to the Chronic Gamblers Treatment Rehabilitation Account. The FY 11 transfer amount is $1. 9 million.

Sections 150 and 151 identify a pharmacist's responsibilities when filling prescriptions for medication used to treat epilepsy. There is no fiscal impact.

Section 152 allows the designee of the Chief Medical Examiner to complete a cremation certificate. There is no fiscal impact.

Sections 153 through 159 make changes to the False Claims Act, which could result in additional revenue associated with increasing the minimum civil penalty by $500 and the maximum civil penalty by $1,000.

Sections 160 through 162 make clarifying changes to the ICF/MR user fee statutes (passed as part of PA 11-6) that enable the state to realize the revenue assumed in PA 11-6. This fee is expected to raise $16. 9 million in FY 12 and $17. 2 million in FY 13.

Section 163 establishes a childhood immunization task force. The section results in an FY 12 cost, estimated to be less than $5,000, to various agencies and the Office of Legislative Management associated with mileage reimbursement of 51 cents per mile for agency staff and legislators (who seek such reimbursement) participating on a childhood immunization taskforce. The task force is required to terminate on the date that it submits its report (or 2/1/12, whichever is later) and, thus, there would be no fiscal impact to the state in FY 13.

Section 164 restricts the placement of a child under the age of six in a congregate child care facility with certain exceptions, resulting in savings of $291,659 in FY 12 and FY 13 to the Department of Children and Families' Board and Care for Children – Residential account. These savings reflect the anticipated transfer of four children, currently served in Safe Homes, to Therapeutic Foster Care.

Section 165 establishes a pilot program for Temporary Family Assistance (TFA) recipients who participate in the Jobs First Employment Services Program (JFES). This could result in a cost of approximately $150,000 associated with extending TFA benefits. It is assumed that existing JFES funding for such participants would be used to meet the pilot program requirements, which would not result in additional costs.

Section 166 increases the rates paid by DSS to adult day care providers by $4 per day. Based on approximately 237,500 annual days of services, this will result in an annualized cost of $950,000. PA 11-6 includes this funding in each year of the biennium.

Sections 167 through 172 change the composition and oversight responsibilities of the Council on Medical Assistance Program Oversight (previously the Council on Medicaid Care Management Oversight). There is no fiscal impact.

Section 173 tasks the Commissioner of Public Health to establish a program, at a cost of $25,000 annually, to support the provision of certain prescribed drugs to victims of sexual assault. The cost of the program is to be accommodated via a set-aside of existing AIDS Services account funding. Funding is included in PA 11-6.

Section 174 through 178 make several technical and conforming changes to hospital reimbursement statutes. These changes conform to current federal requirements to ensure that federal reimbursement for these services is continued.

Section 178 also repeals various obsolete sections of statute.

Section 178 also reverses the Medicaid marital asset exemption change that was enacted in PA 10-73. This section would restore the exemption to 50% of marital liquid assets, with a cap of $109,560. PA 11-6 reflects savings of $29. 3 million in FY 12 and $32 million in FY 13 for this change.

Section 178 also eliminates the Long Term Care Reinvestment Account. This elimination results in the enhanced federal matching funds received under the Money-Follows-the-Person program going to the resources of the General Fund. PA 11-6 assumed additional federal revenue of $4. 8 million in FY 12 and $6. 7 million in FY 13 related to this change.

Section 178 also eliminates the adult foster care program. PA 11-6 reflects savings $14,000 in each year of the biennium for this change.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

The preceding Fiscal Impact statement is prepared for the benefit of the members of the General Assembly, solely for the purposes of information, summarization and explanation and does not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

1 Grandfathered plans include most group insurance plans and some individual health plans created or purchased on or before March 23, 2010. Pursuant to the PPACA, all health plans, including those with grandfathered status are required to provide the following as of September 23, 2010: 1) No lifetime limits on coverage, 2) No rescissions of coverage when individual gets sick or has previously made an unintentional error on an application, and 3) Extension of parents' coverage to young adults until age 26. (www. healthcare. gov)

2 According to the PPACA, compared to the plans' policies as of March 23, 2010, grandfathered plans who make any of the following changes within a certain margin may lose their grandfathered status: 1) Significantly cut or reduce benefits, 2) Raise co-insurance charges, 3) Significantly raise co-payment charges, 4) Significantly raise deductibles, 5) Significantly lower employer contributions, and 5) Add or tighten annual limits on what insurer pays. (www. healthcare. gov)