Colorado Legislative Council Staff

REVISED

STATE FISCAL IMPACT

(replaces fiscal impact dated April 2, 1999)

Drafting Number:

Prime Sponsor(s):

LLS 99-0072

Rep. Keller

Sen. Arnold

Date:

Bill Status:

Fiscal Analyst:

April 22, 1999

Senate HEWI

Janis Baron (303-866-3523)

 

TITLE:            CONCERNING THE PROVISION OF SERVICES TO CHILDREN WHOSE MENTAL ILLNESS PLACES THEM AT RISK OF OUT-OF-HOME PLACEMENT.



Fiscal Impact Summary

FY 1999/2000

FY 2000/2001

State Revenues

General Fund

 

 

State Expenditures

General Fund


$226,545


$226,545

FTE Position Change

0.0 FTE

0.0 FTE

Other State Impact: None

Effective Date: Upon Signature of the Governor

Appropriation Summary for FY 1999-2000:

Department of Human Services

   General Fund$226,545

Local Government Impact: None


 

The fiscal note reflects information received by the Department of Health Care Policy and Financing (DHCPF) from the federal Health Care Financing Administration (HCFA). HCFA has confirmed that the Medicaid program must provide full Medicaid coverage, including mental health treatment services, to a child under 18 who is not otherwise Medicaid eligible, and is placed out of the home in a residential treatment center (RTC) and meets SSI disability criteria. According to federal statute, the state must complete the SSI finding within 90 days. Under federal law, the first month of placement is not covered, nor is there a mandate to cover the cost of room and board.

The initial fiscal note, dated January 30, 1999, assumed HB99-1116 created an "entitlement" to children currently Medicaid ineligible. It further assumed that 60 children would become Medicaid eligible under the bill at a total cost of $553,824 to the Medicaid program, and that these children would qualify for room and board at a total cost of $129,276. As a result of HCFA's determination, DHCPF is currently responsible for providing Medicaid coverage to those children noted in the bill.

 

 


Summary of Legislation

 

            The reengrossed bill creates the "Child Mental Health Treatment Act", and requires that each child who is diagnosed as a mentally ill person, as that term is defined in Section 27-10-102 (7), C.R.S., and who, although not otherwise categorically eligible for Medicaid, is determined to be Medicaid eligible because of his or her need for mental health services and for whom it is not appropriate to file an action in dependency or neglect. A parent or guardian may apply to a mental health agency on behalf of his or her minor child for mental health treatment services for the child, whether the child is categorically eligible for Medicaid under the capitated mental health system or whether the parent believes his or her child is a child at risk of out-of-home placement.

 

 

State Expenditures

 

            Background — Currently, most children in an RTC placement are there either through dependency and neglect or delinquency actions. There are two components to the placement cost: (1) treatment services ($102.56 per day); and (2) room and board ($23.94 per day). Treatment services are funded through the state's Medicaid program (approximately 50% federal funds and 50% General Fund) with appropriations made to the Department of Health Care Policy and Financing. Room and board costs are funded through the General Fund, county funds, and Title IV-E federal funds with appropriations made to the Department of Human Services, Child Welfare and/or Division of Youth Corrections.

 

            Department of Health Care Policy and Financing - No Cost Under the Bill. Although no Medicaid program costs will be incurred under the bill, the Medicaid program will require approximately $1,185,800 in total funding in FY 1999-00 to serve the children identified in the bill. The federal requirement to serve these children currently exists separate from HB 99-1116; but the federal requirement does not provide that the first month treatment costs be covered by Medicaid.

 

            Based upon data from the Department of Human Services, Mental Health Services, it is estimated that there are 400 children who are eligible for RTC services. Historically, approximately one-half of those in need of mental health services will actually seek services (200). Of these 200 children, approximately one-half (100) will not seek services due to the parental responsibility to pay treatment costs for the first calendar month in the facility plus room and board costs for the entire length of placement, leaving 100 children seeking services. The average Child Welfare length of stay for RTC placement is 4.1 months or 125 days. It is assumed parents will be responsible, on average, for 15 days of treatment costs; Medicaid will fund the remaining 110 days. [All children will not enter an RTC on the first of the month. It is assumed that, on average, children will be placed on the 15th of the month.]

 

            The total cost of $1,185,800 includes $1,128,160 for RTC services and $57,640 for acute care Medicaid premiums. The General Fund portion of the cost is $591,714 and the federal funds portion is $594,086. Although identified in this fiscal note, it is assumed that funding for mental health services to these children will be addressed through the budget process.

 

            Department of Human Services - $226,545 General Fund in FY 1999-00 and FY 2000-01. Federal Medicaid requirements provide that there is no mandate to cover the costs of room and board for the children noted in this bill. The reengrossed bill provides that the State Board of Human Services, in consultation with the Department of Health Care Policy and Financing, shall promulgate rules implementing a sliding scale for the payment of services, including mental health treatment and room and board, that are not covered by private insurance or federal Medicaid funding. It is the intent of the General Assembly that the portion of such expenses paid from General Fund moneys shall not exceed the General Fund appropriations made for such purpose in any given fiscal year.

 

            The cost of $226,545 is based upon implementation of a sliding fee scale, wherein the child's parent(s) will be responsible, on average, for 50 percent of treatment costs for the first 15 days of RTC care and the state will be responsible for the remaining 50 percent; and that parents will be responsible for 50 percent of the room and board costs for 125 days of RTC placement and the state will be responsible for the remaining 50 percent. Under federal law, the first month of placement (treatment services) is not covered, nor is there a mandate to cover the cost of room and board for the children identified in HB 99-1116.

 

            The average Child Welfare length of stay for an RTC placement is 4.1 months or 125 days. All children will not enter an RTC on the first of the month. For the purpose of determining a cost, it is assumed that, on average, children will be placed on the 15th of the month.

 

            Treatment Services/Costs — Treatment costs for the first 15 days are estimated at $153,840 ($102.56 x 15 days x 100 children = $153,840). Under the amendment, parents will be responsible for 50 percent of the treatment costs and the General Fund will subsidize the remaining 50 percent ($153,840 / 2 = $76,920). It is estimated that the child will be in placement for 125 days total; Medicaid will fund the remaining 110 days of treatment services.

            Room and Board Costs — Room and board costs for the entire 125-day placement are estimated at $299,250 ($23.94 x 125 days x 100 children = $299,250). Under the amendment, parents will be responsible for 50 percent of the room and board costs and the General Fund will subsidize the remaining 50 percent ($299,250 / 2 = $149,625). It is estimated that the child will be in placement for 125 days total; Medicaid will not fund any portion of the room and board costs.

 

 

State Appropriations

 

            The fiscal note indicates the Department of Human Services should receive a General Fund appropriation for $226,545 for FY 1999-00. The bill includes an appropriation clause for such amount.

 

 

Departments Contacted

 

            Human Services         Health Care Policy and Financing