HB739: relative to the medicaid provider reimbursement system; and business and enterprise tax deductions for employers that offer long term care policies; study of the nursing leveraged scholarship program; development of a plan to establish nursing programs at the community technical colleges; the information and referral network for elderly and chronically ill adults and making an appropriation therefor.

HB 739-FN-A - AS INTRODUCED

2003 SESSION

03-0052

05/01

HOUSE BILL 739-FN-A

AN ACT relative to the medicaid provider reimbursement system; and business and enterprise tax deductions for employers that offer long term care policies; study of the nursing leveraged scholarship program; development of a plan to establish nursing programs at the community technical colleges; the information and referral network for elderly and chronically ill adults and making an appropriation therefor.

SPONSORS: Rep. Rogers Johnson, Rock 83; Rep. J. Gilbert, Rock 83; Sen. Boyce, Dist 4

COMMITTEE: Commerce

ANALYSIS

This bill:

I. Establishes an acuity-based reimbursement system for medicaid providers.

II. Makes an appropriation to the department of health and human services for the long-term care information and referral network.

III. Creates a deduction to the business enterprise tax for employer contributions to long-term care coverage.

IV. Directs the postsecondary education commission to study ways to improve and expand the nursing leveraged scholarship program and to develop a plan to establish nursing programs at the community technical colleges in Keene and Berlin.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03-0052

05/01

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Three

AN ACT relative to the medicaid provider reimbursement system; and business and enterprise tax deductions for employers that offer long term care policies; study of the nursing leveraged scholarship program; development of a plan to establish nursing programs at the community technical colleges; the information and referral network for elderly and chronically ill adults and making an appropriation therefor.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Health and Human Service; Duties of Commissioner; Medical Assistance Program; Acuity-Based Reimbursement System. Amend RSA 161:4, VI(a) to read as follows:

(a) The commissioner of health and human services shall establish rates of reimbursement to providers of medical services under the medical assistance program administered under this chapter and RSA 167. Publication of rates of reimbursement shall be exempt from the provisions of RSA 541-A. Unless otherwise required by federal law, the commissioner shall establish an acuity-based reimbursement system that includes the following:

(1) Semi-annual adjustment of unit rates paid under medicaid which reflect 85 percent of the cost to deliver the allowed service.

(2) Elimination of any reimbursement discount feature, such as a budget neutrality factor.

(3) All allowed or disallowed service costs shall be publicly disclosed at least 90 days prior to any rate adjustment. The rates and allowed services shall be uniform throughout the state.

(4) A requirement to provide rate calculation worksheets for all providers at least 90 days prior to the effective date of the proposed rate change.

(5) A requirement to supply all medicaid providers with software and other materials sufficient to develop and implement the reimbursement procedures.

2 New Paragraph; Rate Setting for Home Health Services; Acuity-Based Reimbursement System. Amend RSA 126-A:18-a by inserting after paragraph III the following new paragraph:

IV. Unless otherwise required by federal law, the rate setting methodology established under paragraph I shall be an acuity-based reimbursement system that includes the following:

(a) Semi-annual adjustment of unit rates for home health services paid under medicaid that reflect 85 percent of the cost to deliver the home health service.

(b) Elimination of any reimbursement discount feature, such as a budget neutrality factor.

(c) Public disclosure of any change in unit rate or allowed service cost at least 90 days prior to any adjustment. The rates and allowed services shall be uniform throughout the state.

(d) A requirement to provide rate calculation worksheets for all providers at least 90 days prior to the effective date of the proposed rate change.

(e) A requirement to supply all home health service providers paid under medicaid with software and other materials sufficient to develop and implement the reimbursement procedures.

3 New Paragraph; Long-Term Care; Acuity-Based Reimbursement System. Amend RSA 151-E:6 by inserting after paragraph III the following new paragraph:

IV. Unless otherwise required by federal law, the acuity-based reimbursement system adopted pursuant to this section shall include the following:

(a) Semi-annual adjustment of unit rates for medicaid provided under this chapter that reflect 85 percent of the cost to deliver the service.

(b) Elimination of any reimbursement discount feature, such as a budget neutrality factor.

(c) Public disclosure of any change in unit rate or allowed service at least 90 days prior to any adjustment. The rates and allowed services shall be uniform throughout the state.

(d) A requirement to provide rate calculation worksheets for all providers at least 90 days prior to the effective date of the proposed rate change.

(e) A requirement to supply all long-term care providers reimbursed under medicaid with software and other materials sufficient to develop and implement the required reimbursement procedures.

4 Long-Term Care; Information and Referral Service. Amend RSA 151-E:5 to read as follows:

151-E:5 Information and Referral. The department shall establish a system of community-based focal points in each county that provide information and referral services to elderly and chronically ill adults. The information and referral network established under this section shall not be used for the purpose of political or legislative advocacy.

5 Appropriation; Information and Referral Service. The sum of $2,000,000 is hereby appropriated to the department of health and human services, for the biennium ending June 30, 2005, for the purpose of contracting with ServiceLink New Hampshire or similar information and referral organizations in order to provide the information and referral network required under RSA 151-E:5. The governor is authorized to draw a warrant for such amount out of any money in the treasury not otherwise appropriated.

6 New Paragraph; Business Enterprise Tax; Special Adjustment; Deduction of Long-Term Care Policy Expense. Amend RSA 77-E:3 by inserting after paragraph III the following new paragraph:

IV. In the case of a business enterprise which is a corporation or subchapter s corporation, a deduction of an amount equal to the business enterprise's contribution to any long-term care plan or policy offered to employees. The deduction shall be shall not include any contribution made by the employee.

7 Post Secondary Education Commission; Report on Nursing Leveraged Scholarship Loan Program. The postsecondary education commission, established under RSA 188-D, shall review the administration and operation of the nursing leveraged scholarship loan program, under RSA 188-D:18-a, to determine if the program may be amended or expanded to better address the shortage of certified nurses in the state. The commission shall report its findings and any recommendations for how to improve or expand the program to the speaker of the house of representatives, the senate president, the house clerk, and the senate clerk on or before November 1, 2003.

8 Post Secondary Education Commission; Plan to Establish Nursing Programs at the Community Technical Colleges in Keene and Berlin. The postsecondary education commission, established under RSA 188-D, shall develop a plan to establish accredited, board-certified, nursing programs at the community technical colleges in Keene and Berlin. The plan shall be submitted to the speaker of the house of representatives, the senate president, the house clerk, and the senate clerk on or before November 1, 2003.

9 Effective Date.

I. Sections 5 and 6 of this act shall take effect July 1, 2003.

II. The remainder of this act shall take effect January 1, 2004.

LBAO

03-0052

Revised 2/6/03

HB 739 FISCAL NOTE

AN ACT relative to the medicaid provider reimbursement system; and business and enterprise tax deductions for employers that offer long term care policies; study of the nursing leveraged scholarship program; development of a plan to establish nursing programs at the community technical colleges; the information and referral network for elderly and chronically ill adults and making an appropriation therefor.

FISCAL IMPACT:

The Department of Health and Human Services stated this bill will increase state and county expenditures and revenue by an indeterminable amount in FY 2004 and each year thereafter. The Department of Revenue Administration stated this bill will decrease state unrestricted revenue by an indeterminate amount in FY 2004 and in each year thereafter. There will be no fiscal impact on local revenue and expenditures.

This bill appropriates $2,000,000 in general funds to the Department of Health and Human Services for the biennium ending June 30, 2005 for the information and referral service.

METHODOLOGY:

The Department of Health and Human Services stated this bill requires the Department to: adjust rates paid to Medicaid providers semi-annually, establish rates that cover 85% of provider costs, notify providers 90 days in advance of rate increases and supply rate calculation software to providers. This bill also eliminates budget neutrality provisions, which limit the nursing home reimbursements to the amount appropriated in the operating budget. The Department assumed this bill applies to all Medicaid providers. The Department does not have cost and acuity data for provider services other than home health and nursing home services, and can only estimate the fiscal impact for these services. The Department stated it is aware that many of the rates for other services are below 85% of provider costs, but cannot determine the increase in state and county expenditures and revenue. The Department provided the following estimates and assumptions:

FY 2004 FY 2005 FY 2006 FY 2007

Expenditures:

Nursing Home $7,778,850 $15,402,450 $15,402,450 $15,402,450

Home Health 698,142 1,528,374 2,579,710 3,735,453

Service Link 1,000,000 1,000,000 0 0

Total $9,476,992 $17,930,824 $17,982,160 $19,137,903

State Revenue $6,260,339 $12,548,853 $13,240,596 $13,995,634

County Revenue $1,948,225 $3,896,450 $3,896,450 $3,896,450

County Expenditures $2,021,842 $4,083,442 $4,249,516 $4,426,682

Assumptions:

· The general fund appropriation for information and referral service is for FY 2004 and FY 2005 only. The Department's budget request includes $2.4 million in FY 2004 and $3.1 in FY 2005 for this service.

· Home Health Services for Elderly and Chronically Ill are funded by 50% federal funds, 25% state funds, and 25% county funds. State revenue reflects the federal and county share.

· Home Health Services for other individuals are funded by 50% federal funds and 50% state general funds.

· County revenue represents payment for services in county nursing facilities.

· County expenditures represent 25% of the services paid through the Division of Elderly and Adult Services.

Nursing Home Assumptions:

· Elimination of budget neutrality increases expenditures by $15,371,400 per year.

· Inflation in nursing home cost is not considered.

· Elimination of budget neutrality yields a rate to cost ratio of 92.6%, therefor, the 85% requirement is met without additional cost.

· The 90-day notification would not result in additional costs.

· Software design would require approximately 620 hours at a rate of $150 per hour in FY 2004.

· Annual software updates would require about 206 hours at $150.

· With an effective date of January 1, 2004 the bill would result in additional costs for half of FY 2004.

Home Health Assumptions:

· Home Health cost information is based on 1996 data from a 1998 report by Myers and Stauffer, LC inflated forward using the CMS Home Health Market Basket Index compared at 85% to present rates.

· Utilization growth is based on FY 2001-2002 data for specific services.

· Software and consulting service costs of $130 per hour based on the 1998 rate plus 15%.

The Department of Revenue Administration does not have information on the amount companies contribute to long-term care plans offered to employees, and cannot estimate the impact of a deduction against the Business Enterprise Tax on state tax revenue.

The Postsecondary Education Commission determined the provisions of this bill will have no fiscal impact on its operations.