On August 25th, the HillCo Client News Flash for health care clients was sent out with links to the Texas Health and Human Services Commission (HHSC) legislative appropriations request (LAR) for fiscal years 2012 – 2013.
The following are key components from the summary statement by Executive Commissioner Tom Suehs in regards to the HHSC budget request for the 2010-2012 Biennium. HHSC will be submitting the HHS Consolidated Budget in October 2010 which will provide additional details on provider rates and other HHS system-wide funding issues and initiatives.
FY 2010-11 Expenditures
The 2010-11 estimated base expenditures total $41.8 billion in All Funds & $14.0 billion in state funding.
The 2010-11 biennial budget assumes a state-funded supplemental appropriation of $1.1 billion for Medicaid and $46.2 million for CHIP.
The biennial shortfall is due primarily to the lack of funding of cost and utilization growth and caseloads higher than appropriated levels. This estimate in LAR was finalized in June 2010 with the submission of the Base Reconciliation and does not consider the enactment of P.L. 111-226, in August 2010 that extends the ARRA increase in FMAP an additional six months, ending June 30, 2011, but at a phased down level of assistance. The FY 2010-11 expenditures also include a biennial reduction of $115.0 million GR associated with the required 5 percent reduction.
For the 2010-11 biennium, caseloads continue to increase:
· Current average Medicaid caseload projections total 3,346,903 recipients in FY 2010 & 3,732,835 recipients in FY 2011.
· Current average CHIP caseload projections total 569,818 recipients in FY 2010 & 581,599 recipients in FY 2011.
· For TANF Cash Assistance, the current average caseload projections total 123,338 recipients in FY 2010 & 130,089 recipients in FY 2011. Prior to the TANF caseload increases during FY 2010, this program had been experiencing caseload decreases for the previous seven years.
FY 2012-13 Request
The baseline request for FY 2012-13 totals $47.3 billion, of which $18.6 billion is GR. This request represents an increase of approximately $4.6 billion in GR, or about 32.8% increase than projected 2010-11 biennial expenditures.
The increase is primarily associated with Medicaid and CHIP caseload growth that was considered entitlement for baseline request as well as the impact of expiring federal increases in FMAP share. However FY 2012-13 Medicaid and CHIP costs were required to be held flat at FY 2011 levels but these costs include those rate-related components of Frew Strategic Initiatives. The Base Request also assumes maintaining the number of eligibility determination staff at FY 2011 levels.
Projected caseload increase:
· CHIP caseloads are projected to increase to 593,836 in FY 2012 to 611,418 recipients in FY 2013.
· Medicaid caseloads are projected to increase to 3,884,015 recipients in FY 2012 & to 3,986,452 recipients in FY 2013.
The CHIP match rate is 72.39 percent in FFY 2012 & FFY 2013.
The Medicaid match rate is 60.55 percent in FFY 2012 & FFY 2013.
For the TANF Cash Assistance Program, federal TANF and state MOE levels were required to be held at the 2010-11 biennial levels. While the TANF cash assistance caseload growth is included in the Base request, the amounts of the monthly and annual grant awards would be decreased because of the assumption of flat funding. TANF cash assistance caseloads are projected to increase to of 133,210 recipients in FY 2012 & 136,507 in FY 2013. The portion of the federal TANF maintenance of effort (MOE) requirement in HHSC’s request is met due in the base request.
Exceptional Item Requests
HHSC is seeking funding for 28 exceptional items totaling a net $1.4 billion in GR & $3.4 billion All Funds. Of the requested exceptional items, eight items represent requests across the HHS system and totals $364.9 million GR & $690.7 million All Funds for the biennium. There are also six exceptional items that represent biennial net savings of $600.6 million GR & $1.2 billion All Funds to the State by expanding managed care services in Medicaid and CHIP. Approximately $1.56 billion GR & $3.68 billion All Funds are needed to maintain current services in Medicaid, CHIP, TANF, Frew, Data Center Services and other agency programs and administration.
Medicaid Acute Care, CHIP and TANF
The biennial cost to maintain current services in client service programs totals over $1.4 billion GR and $3.5 billion in Medicaid, CHIP, & TANF. Exceptional Item funding addresses cost and utilization since caseload growth is assumed in the base request. Requested funding would maintain certain Frew Strategic Initiatives ($91.4 million GR & $96.9 million All Funds). Other than the continuation of rate increases that are already in the Medicaid base cost trends, there is no Frew Strategic Initiative Funding in the FY 2012-13 Base Request.
Current Operating Levels
In an effort to maintain FY 2011 operating levels, $111.2 million GR & $123.2 million All Funds would continue the other agency operations. Frew Strategic Initiatives totals $91.4 million GR & $96.9 million All Funds. The FY 2010-11 base request cannot sustain costs associated with 24 months of the regional and local offices established and increased during the current 2010-11 biennium. The biennial cost for these offices and facilities include leases, utilities, security and janitorial services total $17.8 million GR & $24.3 million All Funds. There are costs for increased EBT card transactions associated with SNAP caseload growth- $1.0 million GR & $2.0 million All Funds.
Other Critical Services and System Improvements
There are four requests associated with eligibility determination services totaling $122.6 million GR & $237.7 million All Funds that would 1) expand the food bank pilot statewide, 2) improve staff retention, 3) add 958 FTEs in FY 2012 and an additional 589 FTEs in FY 2013 for caseload growth, and 4) manage client flow in local offices.
The other requests would fund an increase of $4.5 million GR & All Funds for Family Violence services, establish an autism center – $1.6 million GR & All Funds, implement a federally required asset verification system for MEPD – $2.3 million GR & $4.6 million All Funds, and increase state support of area information centers – $1.7 million GR & $3.5 million All Funds. The Office of Inspector General requests $2.4 million GR & $4.4 million All Funds to add 35 FTEs to address increasing investigation workload.
Medicaid Managed Care Savings Exceptional Items
There are six exceptional items that would generate savings to the State if Medicaid managed care was expanded and if certain services were capitated in Medicaid and CHIP. The biennial net savings of all of the exceptional items is $600.6 million GR & $1.2 billion All Funds. Each cost estimate includes the impact to HHSC, any savings impact to the Department of Aging and Disabilities (DADS) – such as the movement of clients from DADS LTC services to STAR+Plus at HHSC, as well as the estimated revenue increase to the State Treasury in the Insurance Premium Tax. To capitate drugs, there would also be lost revenue in supplement rebates to the State but the capitated rate would be adjusted to allow the Managed Care Organizations to collect those rebates.
HHS System Exceptional Items
There are eight exceptional items requested on behalf of the HHS system that total $364.9 million GR & $690.7 million All Funds. One request continues an initiative implemented two biennia ago by further reducing waiting and interest lists, three relate to IT systems and supports, two create specialized health services and supports, one addresses disproportionality in the HHS system, and one improves the retention and recruitment of medical professionals across the system. Requested state funding represents the state share for all five HHS agencies.
Data Center Services
The funding request of $13.7 million GR & $18.8 million All Funds relates to the Department of Information Resources Data Center Consolidation – $4.4 million GR & $7.3 million All Funds would support increased payments to DIR and $9.4 million GR & $11.5 million All Funds and would be for internal agency costs to support networks and remediate programs to platforms and software versions supported by the DIR contractor.
IT Security Improvements
The funding request of $10.9 million GR & $16.1 million All Funds supports several HHS system initiatives that would improve the physical security and usage of technological systems. Many of these initiatives would fulfill statutory requires or address audit findings.
Technology Improvements for State Hospitals and State Supported Living Centers
The funding request of $8.8 million GR & $12.4 million All Funds for DADS and DSHS would improve several administrative and clinical applications supporting both types of facilities.
Reducing Waiting and Interest Lists
This request would improve the capacity of HHS community care programs. This request totals $265.4 million GR & $543.5 million All Funds. The agency impact is:
· Department of Aging and Disability Services – $172.5 million GR && $402.3 million All Funds: Home and community care waivers, non-Medicaid services, and the In Home and Family Support program. The home and community care waivers include Community Based Alternatives, Community Living Assistance and Support Services, Medically Dependent Children’s Program, Consolidated Waiver Program, Deaf-Blind with Multiple Disabilities, Home and Community Based Services, and Texas Home Living.
· Department of Assistive and Rehabilitative Services – $7.4 million GR & All Funds: Comprehensive Rehabilitation Services and Independent Living.
· Department of State Health Services – $53.8 million GR and All Funds: Child and Adolescent Community Mental Health and Children with Special Health Care Needs.
· HHSC would incur acute Medicaid costs of $31.7 million GR & $80.0 million All Funds associated with some of the clients served by DADS.
Veteran’s Health Initiative
This initiative would provide $14.9 million GR & All Funds in community settings supported by DSHS, DADS, and HHSC to support coordination and develop needed wrap-around services for veterans and their families.
Acquired Brain Injury Waiver
This funding would develop and implement a new Medicaid waiver by FY 2013 for individuals with an acquired brain injury coordinated by the Office of Acquired Brain Injury. The biennial costs total $1.2 million GR and $2.6 million All Funds.
HHS Disproportionality Initiative
This exceptional item funding of $2.2 million GR & $3.1 million All Funds would begin to address disproportionality of services and clients in the HHS System with staffing, education, and collaborative initiatives.
Medical Professional Retention and Recruitment
There is a request of $41.7 million GR & $70.3 million All Funds to improve the retention and recruitment of certain medical workers (nurses, LVNs, and nursing assistants) in the state hospitals and state supported living centers. Psychiatric Nursing and Mental Retardation Assistants would receive a one-time salary increase of 10 percent, LVNs – 15 percent salary increase, direct care nurses – 7.5 percent salary increase and non-direct care nurses – 5 percent salary increase. Biennial cost by agency totals
$19.2 million GR & $47.5 million All Funds at DADS and $22.5 million GR a $22.8 million All Funds at DSHS. A salary increase for DADS LTC eligibility workers is also included.
10 Percent Reduction Schedule
The Commission’s ten percent reduction schedule totals $85.2 million GR across 19 category reductions. The reduction would impact 246 FTEs of which 60 percent are currently vacant. There is also a reduction of $2.3 million GR to acknowledge that that 2012-13 base is lower than FY 2010-11 in non-exempt areas by $23.0 million GR as HHSC did not utilize or re-purpose one-time state funding that could have reduced the target reduction. Other reductions would result in the State’s failure to maintain TANF MOE requirements and reductions in contracts would impact service levels.
For more details, please visit: http://www.hhsc.state.tx.us/LAR/2012-2013/LAR.shtml