Synopsis As Introduced Creates the FY07 Cost of Doing Business Adjustment Act. Provides that retroactive to July 1, 2006, a 3% increase shall be included in all purchase of care contracts and grant agreements paid under specified line items in the fiscal year 2007 State budget for the Department of Human Services, including early intervention, family case management, and domestic violence. Effective immediately.
Fiscal Note (Department of Human Services)
The language authorizes a 3% COLA to be included in all purchase of care contracts and grant agreements paid under specified line items in the fiscal year 2007 State budget for the Department of Human Services. The cost to implement the 3% COLA is $6.5 million, net cost to the State after Medicaid claim is $4.9 million. The bill does not include any appropriation to support the COLA.
Fiscal Note (Dept. of Healthcare & Family Services)
The 3% rate adjustment included in House Bill 5839, as introduced, will cost the Department of Healthcare and Family Services' Medical Assistance Program approximately $28 million annually ($14.3 million net of federal financial participation). Federal financial participation (FFP) is not available for retroactive rate adjustments. Therefore, for any rate adjustments made in FY07, FFP will not be available until necessary State plan amendments and public notice requirements are met. These requirements will not decrease the gross cost of the included retroactive rate increase, but will significantly decrease the amount of FFP available to offset its net State cost. The legislation will require the Department to adjust its physician and transportation reimbursements as well as rates paid to providers of Medicaid therapies for 0-3 year olds and to school-based health centers. HB 5839 does not provide additional funding for the mandated rate adjustments.