Revision: March 5, 2010, midnight
HB 646-FN-LOCAL - AS AMENDED BY THE HOUSE
10Feb2010… 0192h
2009 SESSION
10/01
HOUSE BILL 646-FN-LOCAL
AN ACT relative to caps on total billings to counties for nursing home care services.
SPONSORS: Rep. Osborne, Merr 12; Rep. Weed, Ches 3; Rep. Vachon, Straf 3; Rep. Cooney, Graf 7; Rep. Theberge, Coos 4
COMMITTEE: Municipal and County Government
This bill requires the reduction of the annual caps on total billings to counties in the same percentage as any statewide nursing home rate reduction attributable to application of a budget neutrality factor by the department of health and human services.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
10Feb2010… 0192h
09-0435
10/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Nine
AN ACT relative to caps on total billings to counties for nursing home care services.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subparagraph; County Nursing Home; Reimbursement of Funds; Adjustment of Caps. Amend RSA 167:18-a, II by inserting after subparagraph (b) the following new subparagraph:
(c) The caps on total billings established in subparagraph (a) shall be reduced for each state fiscal year in the same percentage as any average statewide nursing home rate reduction attributable to application of a budget neutrality factor from the rates in effect on July 1 of each state fiscal year.
2 Effective Date. This act shall take effect upon its passage.
LBAO
09-0435
Amended 03/03/10
HB 646 FISCAL NOTE
AN ACT relative to caps on total billings to counties for nursing home care services.
FISCAL IMPACT:
The Department of Health and Human Services and the New Hampshire Association of Counties state this bill, as amended by the House (Amendment #2010-0192h), will decrease county expenditures and increase state general fund expenditures by an indeterminable amount in FY 2011 and each year thereafter. This bill will have no fiscal impact on state, county, and local revenue or local expenditures.
METHODOLOGY:
The Department of Health and Human Services states this bill requires the reduction of the annual caps on total billings to counties in the same percentage as any statewide nursing home rate reduction attributable to application of a budget neutrality factor by DHHS. For FY 2010 through FY 2012, RSA 167:18-a, II (a) establishes the gross county cap at $105,000,000. A county credit of $5,000,000 is applied against the gross county cap in each fiscal year pursuant to RSA 167:18-a, III. In FY 2010, there was an additional reduction in the county cap of approximately $1,306,636 per an executed Memorandum of Agreement (MOA) between the county and state in July 2008. Nursing home acuity base reimbursement rates are set two times a year, on July 1st and January 1st of each fiscal year. The Budget Neutrality Factor (BNF) is the percentage amount that allowable nursing home rates, as calculated using the current nursing rate setting process, are reduced to equal the budget for nursing homes in the biennial operating budget, based on actual and projected nursing home services utilization. Since the budget neutrality factor is determined after the acuity based rate setting process is completed and since it’s not possible to project the acuity level of residents within every facility, the fiscal impact is indeterminable at this time. The Department assumes that this bill is prospective (not retroactive) and would begin on July 1, 2010 (FY 2011).
Although the Department is unable to determine the fiscal impact of the bill in FY 2011 and each year thereafter, in order to provide an example of the potential impact, the Department has provided estimates using FY 2010 figures. The Department states the adjusted county share of long-term care costs is capped at $98,693,364 in FY 2010 after accounting for the statutory credit and the executed MOA. The Department states the BNF on July 1, 2009 was 24.33%, and on January 1, 2010 it was increased to 29.72%. This increase in the BNF caused an aggregate average nursing home rate reduction of 6.3%. If this bill were in effect in FY 2010, the county cap would have been reduced by $6,217,682 (6.3% X $98,693,364). As a result, county expenditures would have decreased and state expenditures would have increased by $6,217,682 as a result of this bill. The Department states the reduction in the county share would have to be made up with additional general fund appropriations. Otherwise, further rate reductions would be required which would lead to further reductions of the county cap, which would lead to further rate reductions, and this process would continue. This bill does not contain an appropriation.
The New Hampshire Association of Counties states this bill reduces the cap on county expenditures for long-term care, which is currently $105,000,000, by the percentage of a nursing home rate reduction which results from the application of a budget neutrality factor. The Association states DHHS applied a budget neutrality factor of 29.72% to the nursing home reimbursement rates on January 1, 2010 which resulted in an average statewide rate reduction of 6.8%. Using the gross county cap amount of $105,000,000 in FY 2010, prior to the application of the county credit ($5,000,000) and the impact of the MOA between the state and counties ($1,306,636), the Association estimates this bill would reduce the gross county cap by $7,140,000 (6.8% X $105,000,000). County expenditures would decrease by $7,140,000 as a result. The Association is unable to determine the fiscal impact in FY 2011 and each year thereafter.