The Long Bill – the eagerly-awaited state budget bill introduced in the House Wednesday – gives us an updated look at the FY 2012-13 appropriations for the Department of Health Care Policy and Financing (HCPF).
Thanks to an improved economic forecast released in March, there has been less angst in producing this budget agreement than in the past few years, with sufficient revenue to pay for the Senior Homestead Exemption and to restore proposed cuts to K-12 and higher education.
The total appropriations for HCPF are $5.56 billion for FY2012-13, an increase of $400 million, or 7 percent, from FY2011-12 appropriations. The total appropriations include the general fund, federal funds and cash funds. General funds are funds from general tax revenues such as the state sales and income taxes. The proposed general fund appropriations for HCPF are $1.86 billion, an increase of $161 million, or 7 percent, from FY2011-12.
HCPF appropriations make up 25 percent of the general fund operating appropriations in FY2012-13.
The majority of the increased appropriations for HCPF are designated to fund Medicaid medical and long-term care services for an expanded population; enrollment is projected to grow 10 percent to 687,473 in FY2012-13. The caseload for Medicaid mental health services is also projected to increase 10 percent. Together, medical, long-term care services and mental health services will increase general fund appropriations by $95 million and will total $1.5 billion in FY2012-13.
The caseload for the Children’s Basic Health Plan (CHP+) is projected to decline slightly due to legislation last year that modified eligibility and moved a portion of children (SB11-008) and prenatal clients (SB 11-250) to the Medicaid program. Total enrollment for children and pregnant women is projected to be 68,902 in FY2012-13. Total funding for CHP+ services in FY2012-13 is $182.5 million and is provided by a combination of fund sources including state ($64.5 million) and federal funds ($118 million).
The Long Bill includes $6.1 million in total funds and $3.05 million in general funds for the Colorado Indigent care Program (CICP). The most recent estimate of unduplicated clients served by CICP is 225,906 in FY 2010-11.
During the recession, the JBC and the legislature used a number of temporary measures to garner general funds to pay for mandatory Medicaid services. This year the committee has decided against recommendation that the legislature declare a fiscal emergency to use Amendment 35 tobacco funds or the primary care funds to pay for Medicaid services. Instead, the Long Bill increases appropriations by $81 million so that the Amendment 35 and primary care funds may be used as originally intended. The budget includes $28 million for the primary care fund for safety net clinics.
The long bill also includes a number of department proposals to reduce program expenditures, including:
- A gainsharing proposal to pay financial rewards to providers participating in the Medicaid Accountable Care Collaborative (ACC), and to Federally Qualified Health Centers (FQHCs), Rural Health Clinics (RHCs) and Behavioral Health Organizations (BHOs) in FY2012-13. JBC estimates this proposal will reduce the general fund by $540,000 in FY 2012-13.
- Cost containment initiatives including improved management and pricing of prescription medications, improved management of orthodontics and reduced reimbursement rates for developmental and adolescent screenings. These proposals were adopted in the FY2011-12 supplemental appropriations bill in February 2012. The general fund savings for FY2012-13 are projected to be $2.8 million.
- An increase in co-payments for CHP+ clients with family incomes above 100 percent of the federal poverty level (FP)L. Co-payments will be higher for inpatient and outpatient hospital services, emergency and urgent care, laboratory and X-ray services.
- Increased CHP+ enrollment fees for children with family income above 205 percent of poverty. This proposal was incorporated in the FY2011-12 supplemental appropriations in January 2012. The general fund savings for FY2012-13 are projected to be $380,000.
The JBC recommended reducing the general fund portion of nursing facility per diem rates by 1.5 percent. The JBC has sponsored legislation (HB 12-1340) to reduce the rates for the past two years and is sponsoring legislation to reduce the rate indefinitely. If passed, HB 12-1340 is projected to reduce expenditures by an additional $4.5 million in FY2012-13.
Meanwhile, the total appropriations for the Colorado Department of Public Health and Environment increased to $462 million for FY2012-13, an increase of $16 million, or 3.6 percent, from FY2011-12. The proposed general fund appropriations for the department increased 1.3 percent to $27.8 million for FY 2012-13.
The biggest news for CDPHE funding is that $33 million in Amendment 35 tobacco tax dollars were retained instead of being redirected to medical services premiums as they were last year. Slight increases in program spending are proposed for the Centers for Health and Environmental Information, (6.7 percent general fund increase), Division of Environmental Health and Sustainability (9.7 percent general fund increase) and the Prevention Services Division (2.6 percent general fund increase).