Summary: Executive Budget Recommendation

Summary: House Subcommittee Budget Recommendation

COMMUNITY HEALTH

FY 2006-07

Analysts: Margaret Alston, Sue Frey, Steve Stauff

		FY 2006-07	FY 2006-07	FY 2006-07	FY 2006-07	*Difference: House* *from FY 2005-06 YTD*
	FY 2005-06 YTD	Executive	Senate	House	Enacted	*Amount*	%
IDG/IDT	$34,090,000	$37,286,100	$37,286,100	$37,286,100		3,196,100	9.4
Federal	5,533,597,400	6,103,178,000	6,088,988,300	5,825,001,100		291,403,700	5.3
Local	231,524,400	241,177,400	241,177,400	241,177,400		9,653,000	4.2
Private	59,073,800	61,326,900	61,326,900	63,826,900		4,753,100	8.0
Restricted	1,516,009,000	1,817,312,800	1,817,312,800	1,812,976,900		296,967,900	19.6
GF/GP	2,951,899,400	3,001,975,800	2,947,975,800	2,926,783,300		(25,116,100)	(0.9)
Gross	$10,326,194,000	$11,262,257,000	$11,194,067,300	$10,907,051,700		*$580,857,700*	*5.6*
FTEs	4,674.6	4,671.1	4,694.1	4,658.1		(16.5)	(0.4)

Major Budget Changes from FY 2005-06 YTD Appropriations	FY 2005-06 YTD	House Change
*1. Economic Adjustments* Includes $29.8 million gross ($13.4 million GF/GP) to fund 3.5% salary and wage increases for non-bargaining and unionized employees, and economic adjustments for defined benefit and contribution retirement, insurance, building occupancy, food, worker's compensation, and fuel and utility costs for FY 2006-07. House proposal would lower the Executive recommended worker's compensation adjustment by $1.0 million gross (all GF/GP).	Gross IDG Federal Restricted Local Private GF/GP	N/A N/A N/A N/A N/A N/A N/A	$29,775,500 2,754,300 4,626,700 1,772,700 7,226,800 5,700 $13,389,300
*2. Actuarially Sound Capitation Rates* Increases capitation payment rates for Health Plan Services by 5.0% and Medicaid Mental Health and Substance Abuse Services by 2.0% ($88.0 million gross, $38.4 million GF/GP) to ensure rates are actuarially sound in FY 2006-07. $100 point of difference has been established for the Executive technical correction.	Gross Federal Restricted Local GF/GP	$3,546,870,800 2,013,657,500 395,317,800 29,737,100 $1,108,158,400	$87,951,700 49,587,100 0 0 $38,364,600
*3. Community Mental Health Direct Care Worker Increase* Adds $10.4 million gross ($4.5 million GF/GP) to finance a 2% wage increase for direct care workers in community mental health settings.	Gross Federal GF/GP	N/A N/A N/A	$10,400,000 5,863,500 $4,536,500
4. *Detroit-Wayne* *County CMHSP* Does not include Senate proposed Detroit-Wayne County CMHSP non-Medicaid funding reduction of $15.0 million contingent upon the CMHSP becoming an authority byOctober 1, 2006. House proposal includes boilerplate that would lower funding by $50.0 million if the CMHSP does not become an authority bySeptember 1, 2006. (Sec. 459)	Gross GF/GP	$312,598,300 $312,598,300	$0 $0
5. *Salvation* *Army* *Harbor* *Light Program* Adds $400,000 gross (all GF/GP) for the Salvation Army Harbor Light Program.	Gross Federal GF/GP	$3,580,400 2,685,300 $895,100	$400,000 0 $400,000
*6. Children's Waiver Home Care Program* Reduces funding for Children's Waiver Home Care Program by $2.0 million gross ($872,400 GF/GP) to reflect current caseload.	Gross Federal GF/GP	$19,549,800 11,063,200 $8,486,600	($2,000,000) (1,127,600) ($872,400)
*7. Public Health Funding Increases* Does not include Senate proposed GF/GP spending of $100,000 to establish a Methamphetamine Cleanup Fund, $100,000 to establish 211 Human Services Information Line, $100,000 for Parkinson's Disease programming, $100,000 for Huntington's Disease programming, $75,000 to establish Medication Management Pilot, $50,000 for Arthritis, and $25,000 for a Diabetes Management Pilot Project. Includes $100 GF/GP placeholder to establish a Methamphetamine Cleanup Fund.	Gross GF/GP	$0 $0	$100 $100
*8. Move Surgeon General Funding to Infant Mortality* Eliminates funding for the Surgeon General position and transfers the related funding of $240,000 GF/GP within the budget for infant mortality project grants.	Gross GF/GP	$0 $0	$0 $0
*9. Vital Records* Increases Vital Records funding by $300,000 to support the vital records program including expenses related to revised official document printing standards required for homeland security purposes.	Gross IDG-FIA Federal Restricted GF/GP	$7,458,800 710,500 2,017,900 4,730,400 $0	$300,000 0 0 0 $300,000
*10. AIDS Drug Assistance Program* Adds $2.5 million of additional private funds revenue to the AIDS Drug Assistance Program for anticipated increase in total rebates from pharmaceutical manufacturers on AIDS and HIV medications.	Gross Federal Private Restricted GF/GP	$31,502,000 23,756,600 3,250,500 4,494,900 $0	$2,500,000 0 2,500,000 0 $0
*11. Ages 0-3 Early Childhood Secondary Prevention* Shifts all DCH funding for this program to the Department of Human Services budget to consolidate funding.	Gross GF/GP	$524,000 $524,000	($524,000) ($524,000)
*12. Healthy* *Michigan* *Fund Adjustments* Reallocates HealthyMichigan Funds. Increases are made for the Nurse Family Partnership Program, diabetes and kidney program, lead poisoning prevention and WIC smoking reduction. Funding reductions are made to projects for health disparities, infant mortality, and physical fitness. Federal increase reflects Medicaid match on the Nurse Family Partnership funding.	Gross Federal Restricted GF/GP	$43,512,700 0 43,512,700 $0	$1,138,300 1,100,000 38,300 $0
*13.* *Michigan* *First Healthcare Plan* Adds $100 placeholder for anticipated federal funding that will be used to match existingMichigan funds to create the Michigan First Healthcare Plan, a plan to extend basic, low-cost health insurance coverage to 550,000 uninsuredMichigan residents. State matching funds would be met by funds already spent inMichigan on health care for the uninsured. This plan will require a waiver from the federal government and if approved is anticipated to beginApril 1, 2007. (Sec.1501, 1502 & 1503)	Gross Federal GF/GP	$0 0 $0	$100 100 $0
*14. Medicaid Home Help Worker Minimum Wage Increase* Adds $15.9 million gross ($6.95 million GF/GP) to increase the minimum hourly wage for Medicaid home help workers, but retains the current wage amount for services provided by relatives. (Sec.1691)	Gross Federal GF/GP	$186,060,500 105,291,600 $80,768,900	$15,945,300 8,990,000 $6,955,300
*15. Asset Lookback and Audit Savings* Reduces funding by $14.0 million gross ($7.0 million GF/GP) representing additional savings from Medicaid asset lookback and audit activity related to changes in the Federal Deficit Reduction Act. Savings of $7.0 million GF/GP are reduced by $2.0 million GF/GP for additional staffing costs in both the Department of Human Services budget and the Medical Services Administration unit.	Gross Federal GF/GP	N/A N/A N/A	($14,047,700) (8,047,700) ($6,000,000)
*16. Recovery of Pharmaceutical Overpayments* Recognizes savings of $22.9 million gross ($10.0 million GF/GP) from Medicaid pharmaceutical overpayment recoveries as identified in a recent report from the State Auditor General.	Gross Federal GF/GP	N/A N/A N/A	($22,924,900) (12,924,900) ($10,000,000)
*17. Durable Medical Equipment* Institute a preferred provider list for durable medical equipment and recognize savings of $7.0 million gross ($3.1 million GF/GP). (Sec.1735)	Gross Federal GF/GP	($1,926,300) (1,090,100) ($836,200)	($7,000,000) (3,946,600) ($3,053,400)
*18. Federal Changes in Asset Test for Medicaid Eligibility* Includes savings of $11.5 million gross ($5.0 million GF/GP) due to tightening of the asset transfer rules for long term care eligibility. The federal Deficit Reduction Act included several provisions to reduce Medicaid costs at both the state and federal levels. (Sec.1759)	Gross Federal GF/GP	N/A N/A N/A	($11,462,400) (6,462,400) ($5,000,000)
*19. Copayments and Premiums Expansion* Recognizes savings of $5.6 million gross ($2.4 million GF/GP) through the increased use of copayments and premiums due to the expansion of cost-sharing in the federal Deficit Reduction Act. (Sec.1631 & Sec.1737)	Gross Federal GF/GP	N/A N/A N/A	($5,900,000) (3,326,400) ($2,573,600)
*20. Medicare Part D "Clawback"* Reduces estimated cost for Medicare part D eligible coverage based on updated expenditure data.	Gross GF/GP	$174,855,500 $174,855,500	($15,096,000) ($15,096,000)
*21. Health Information Technology Initiative* Authorizes $5.0 million to finance health care information technology initiatives. (Sec.1760)	Gross GF/GP	$0 $0	$5,000,000 $5,000,000
*22. Personal Care Supplement Increase* Increases the Medicaid personal care supplement paid to adult foster care facilities and homes for the aged by $10 per month. (Sec.1746)	Gross Federal GF/GP	$23,344,800 13,210,800 $10,134,000	$852,000 480,400 $371,600
*23. Medicaid Optional Eligibility Changes* Eliminates optional Medicaid eligibility for 19-20 year olds, except former foster care cases, and parents/caretaker relatives. (Sec.1646)	Gross Federal GF/GP	($131,730,200) (74,269,500) ($57,460,700)	($131,730,200) (74,269,500) ($57,460,700)
*24. Medicaid Physician Payment Rates* Provides for a 5% increase in Medicaid physician payment rates. (Sec.1636)	Gross Federal GF/GP	$779,943,500 441,370,100 $338,573,400	$41,558,900 23,430,900 $18,128,000
*25. Specialized Case Management Program* Recognizes savings from implementation of a specialized case management program targeting the highest cost Medicaid patients. (Sec.1756)	Gross Federal GF/GP	N/A N/A N/A	($5,000,000) (2,819,000) ($2,181,000)
*26. Graduate Medical Education* Rejects the carve-in of graduate medical education (GME) payments to the Medicaid HMOs and partially restores prior reductions in GME.	Gross Federal GF/GP	$168,954,800 95,611,500 $73,343,300	$6,800,000 3,833,800 $2,966,200
*27. Non-Emergency Medical Transportation* Includes savings from implementation of a brokerage contract for Medicaid non-emergency medical transportation services. (Sec.1634)	Gross Federal GF/GP	$9,973,600 5,644,100 $4,329,500	($2,200,000) (1,100,000) ($1,100,000)
*28. MI Child Premiums* Increases the monthly premium for the MIChild program from $5 to $10. (Sec.1673)	Gross Federal GF/GP	($1,300,000) (903,100) ($396,900)	($1,300,000) (903,100) ($396,900)
*29. Pharmacy Quality Improvement Program* Increases the savings associated with the Pharmacy Quality Improvement Program by $3.0 million annually.	Gross Federal GF/GP	($9,214,500) (5,214,500) ($4,000,000)	($3,000,000) (1,691,400) ($1,308,600)

Major Budget Changes from FY 2005-06 YTD Appropriations

FY 2005-06 YTD

House Change

1. Economic Adjustments

Includes $29.8 million gross ($13.4 million GF/GP) to fund 3.5% salary and wage increases for non-bargaining and unionized employees, and economic adjustments for defined benefit and contribution retirement, insurance, building occupancy, food, worker's compensation, and fuel and utility costs for FY 2006-07.

House proposal would lower the Executive recommended worker's compensation adjustment by $1.0 million gross (all GF/GP).

Gross

IDG

Federal

Restricted

Local

Private

GF/GP

N/A

N/A

$29,775,500

2,754,300

4,626,700

1,772,700

7,226,800

5,700

$13,389,300

2. Actuarially Sound Capitation Rates

Increases capitation payment rates for Health Plan Services by 5.0% and Medicaid Mental Health and Substance Abuse Services by 2.0% ($88.0 million gross, $38.4 million GF/GP) to ensure rates are actuarially sound in FY 2006-07. $100 point of difference has been established for the Executive technical correction.

Gross

Federal

Restricted

Local

GF/GP

$3,546,870,800

2,013,657,500

395,317,800

29,737,100

$1,108,158,400

$87,951,700

49,587,100

$38,364,600

3. Community Mental Health Direct Care Worker Increase

Adds $10.4 million gross ($4.5 million GF/GP) to finance a 2% wage increase for direct care workers in community mental health settings.

Gross

Federal

GF/GP

N/A

N/A

$10,400,000

5,863,500

$4,536,500

4. Detroit-Wayne County CMHSP

Does not include Senate proposed Detroit-Wayne County CMHSP non-Medicaid funding reduction of $15.0 million contingent upon the CMHSP becoming an authority byOctober 1, 2006. House proposal includes boilerplate that would lower funding by $50.0 million if the CMHSP does not become an authority bySeptember 1, 2006. (Sec. 459)

Gross

GF/GP

$312,598,300

$312,598,300

5. Salvation Army Harbor Light Program

Adds $400,000 gross (all GF/GP) for the Salvation Army Harbor Light Program.

Gross

Federal

GF/GP

$3,580,400

2,685,300

$895,100

$400,000

$400,000

6. Children's Waiver Home Care Program

Reduces funding for Children's Waiver Home Care Program by $2.0 million gross ($872,400 GF/GP) to reflect current caseload.

Gross

Federal

GF/GP

$19,549,800

11,063,200

$8,486,600

($2,000,000)

(1,127,600)

($872,400)

7. Public Health Funding Increases

Does not include Senate proposed GF/GP spending of $100,000 to establish a Methamphetamine Cleanup Fund, $100,000 to establish 211 Human Services Information Line, $100,000 for Parkinson's Disease programming, $100,000 for Huntington's Disease programming, $75,000 to establish Medication Management Pilot, $50,000 for Arthritis, and $25,000 for a Diabetes Management Pilot Project. Includes $100 GF/GP placeholder to establish a Methamphetamine Cleanup Fund.

Gross

GF/GP

$100

$100

8. Move Surgeon General Funding to Infant Mortality

Eliminates funding for the Surgeon General position and transfers the related funding of $240,000 GF/GP within the budget for infant mortality project grants.

Gross

GF/GP

9. Vital Records

Increases Vital Records funding by $300,000 to support the vital records program including expenses related to revised official document printing standards required for homeland security purposes.

Gross

IDG-FIA

Federal

Restricted

GF/GP

$7,458,800

710,500

2,017,900

4,730,400

$300,000

$300,000

10. AIDS Drug Assistance Program

Adds $2.5 million of additional private funds revenue to the AIDS Drug Assistance Program for anticipated increase in total rebates from pharmaceutical manufacturers on AIDS and HIV medications.

Gross

Federal

Private

Restricted

GF/GP

$31,502,000

23,756,600

3,250,500

4,494,900

$2,500,000

2,500,000

11. Ages 0-3 Early Childhood Secondary Prevention

Shifts all DCH funding for this program to the Department of Human Services budget to consolidate funding.

Gross

GF/GP

$524,000

$524,000

($524,000)

($524,000)

12. Healthy Michigan Fund Adjustments

Reallocates HealthyMichigan Funds. Increases are made for the Nurse Family Partnership Program, diabetes and kidney program, lead poisoning prevention and WIC smoking reduction. Funding reductions are made to projects for health disparities, infant mortality, and physical fitness. Federal increase reflects Medicaid match on the Nurse Family Partnership funding.

Gross

Federal

Restricted

GF/GP

$43,512,700

43,512,700

$1,138,300

1,100,000

38,300

13. Michigan First Healthcare Plan

Adds $100 placeholder for anticipated federal funding that will be used to match existingMichigan funds to create the Michigan First Healthcare Plan, a plan to extend basic, low-cost health insurance coverage to 550,000 uninsuredMichigan residents. State matching funds would be met by funds already spent inMichigan on health care for the uninsured. This plan will require a waiver from the federal government and if approved is anticipated to beginApril 1, 2007. (Sec.1501, 1502 & 1503)

Gross

Federal

GF/GP

$100

100

14. Medicaid Home Help Worker Minimum Wage Increase

Adds $15.9 million gross ($6.95 million GF/GP) to increase the minimum hourly wage for Medicaid home help workers, but retains the current wage amount for services provided by relatives. (Sec.1691)

Gross

Federal

GF/GP

$186,060,500

105,291,600

$80,768,900

$15,945,300

8,990,000

$6,955,300

15. Asset Lookback and Audit Savings

Reduces funding by $14.0 million gross ($7.0 million GF/GP) representing additional savings from Medicaid asset lookback and audit activity related to changes in the Federal Deficit Reduction Act. Savings of $7.0 million GF/GP are reduced by $2.0 million GF/GP for additional staffing costs in both the Department of Human Services budget and the Medical Services Administration unit.

Gross

Federal

GF/GP

N/A

N/A

($14,047,700)

(8,047,700)

($6,000,000)

16. Recovery of Pharmaceutical Overpayments

Recognizes savings of $22.9 million gross ($10.0 million GF/GP) from Medicaid pharmaceutical overpayment recoveries as identified in a recent report from the State Auditor General.

Gross

Federal

GF/GP

N/A

N/A

($22,924,900)

(12,924,900)

($10,000,000)

17. Durable Medical Equipment

Institute a preferred provider list for durable medical equipment and recognize savings of $7.0 million gross ($3.1 million GF/GP). (Sec.1735)

Gross

Federal

GF/GP

($1,926,300)

(1,090,100)

($836,200)

($7,000,000)

(3,946,600)

($3,053,400)

18. Federal Changes in Asset Test for Medicaid Eligibility

Includes savings of $11.5 million gross ($5.0 million GF/GP) due to tightening of the asset transfer rules for long term care eligibility. The federal Deficit Reduction Act included several provisions to reduce Medicaid costs at both the state and federal levels. (Sec.1759)

Gross

Federal

GF/GP

N/A

N/A

($11,462,400)

(6,462,400)

($5,000,000)

19. Copayments and Premiums Expansion

Recognizes savings of $5.6 million gross ($2.4 million GF/GP) through the increased use of copayments and premiums due to the expansion of cost-sharing in the federal Deficit Reduction Act. (Sec.1631 & Sec.1737)

Gross

Federal

GF/GP

N/A

N/A

($5,900,000)

(3,326,400)

($2,573,600)

20. Medicare Part D "Clawback"

Reduces estimated cost for Medicare part D eligible coverage based on updated expenditure data.

Gross

GF/GP

$174,855,500

$174,855,500

($15,096,000)

($15,096,000)

21. Health Information Technology Initiative

Authorizes $5.0 million to finance health care information technology initiatives. (Sec.1760)

Gross

GF/GP

$5,000,000

$5,000,000

22. Personal Care Supplement Increase

Increases the Medicaid personal care supplement paid to adult foster care facilities and homes for the aged by $10 per month. (Sec.1746)

Gross

Federal

GF/GP

$23,344,800

13,210,800

$10,134,000

$852,000

480,400

$371,600

23. Medicaid Optional Eligibility Changes

Eliminates optional Medicaid eligibility for 19-20 year olds, except former foster care cases, and parents/caretaker relatives. (Sec.1646)

Gross

Federal

GF/GP

($131,730,200)

(74,269,500)

($57,460,700)

($131,730,200)

(74,269,500)

($57,460,700)

24. Medicaid Physician Payment Rates

Provides for a 5% increase in Medicaid physician payment rates. (Sec.1636)

Gross

Federal

GF/GP

$779,943,500

441,370,100

$338,573,400

$41,558,900

23,430,900

$18,128,000

25. Specialized Case Management Program

Recognizes savings from implementation of a specialized case management program targeting the highest cost Medicaid patients. (Sec.1756)

Gross

Federal

GF/GP

N/A

N/A

($5,000,000)

(2,819,000)

($2,181,000)

26. Graduate Medical Education

Rejects the carve-in of graduate medical education (GME) payments to the Medicaid HMOs and partially restores prior reductions in GME.

Gross

Federal

GF/GP

$168,954,800

95,611,500

$73,343,300

$6,800,000

3,833,800

$2,966,200

27. Non-Emergency Medical Transportation

Includes savings from implementation of a brokerage contract for Medicaid non-emergency medical transportation services. (Sec.1634)

Gross

Federal

GF/GP

$9,973,600

5,644,100

$4,329,500

($2,200,000)

(1,100,000)

($1,100,000)

28. MI Child Premiums

Increases the monthly premium for the MIChild program from $5 to $10. (Sec.1673)

Gross

Federal

GF/GP

($1,300,000)

(903,100)

($396,900)

($1,300,000)

(903,100)

($396,900)

29. Pharmacy Quality Improvement Program

Increases the savings associated with the Pharmacy Quality Improvement Program by $3.0 million annually.

Gross

Federal

GF/GP

($9,214,500)

(5,214,500)

($4,000,000)

($3,000,000)

(1,691,400)

($1,308,600)

Major Boilerplate Changes from FY 2005-06
**Sec. 423. Funding for Substance Abuse Programs and Services –MODIFIED** Specifies that the Department establish a workgroup to examine and review the source and expenditure of funds for substance abuse programs and services. Also, requires the workgroup to develop and recommend cost-effective measures for the expenditure of funds and delivery of substance abuse programs and services.
**Sec. 450. Audit and Reporting Requirements for CMHSPs –REPLACED** Mandates that the Department implement the recommendations of the workgroup on streamlining the audit and reporting requirements for CMHSPs or specialty prepaid health plans byOctober 1, 2006.
**Sec. 460. Uniform Standards for Reporting of Administrative Costs by CMHSPs –REPLACED** Requires the Department to fully implement the uniform definitions, standards, and reporting of administrative costs by prepaid inpatient health plans (PIHPs), CMHSPs, and contracted organized provider systems that receive payment or reimbursements from PIHPs and CMHSPs bySeptember 30, 2007.
**Sec. 468. Incorporation of Coordinating Agencies into CMH Authorities –NEW** Requires the Department to recommend changes in its criteria for the incorporation of a city, county, or regional substance abuse coordinating agency into a local community mental health authority.
**Sec. 469. Funding Distribution Model for Coordinating Agencies– NEW** Directs the Department to implement a funding distribution model for coordinating agencies based on findings by the former substance abuse block grant workgroup no later thanOctober 31, 2006.
**Sec. 470. Integration of Mental Health and Substance Abuse Services– NEW** Specifies that the Department establish written expectations, such as coordination and consolidation of administrative functions, for CMHSPs, PIHPs, coordinating agencies, and counties on the integration of mental health and substance abuse services.
**Sec. 471. Administrative Costs for Coordinating Agencies– NEW** Limits administrative costs for coordinating agencies and the Salvation Army Harbor Light Program to a percentage of their total expenditures in FY 2004-05 or 9%, whichever is less.
**Sec. 472. Retention of GF/GP by CMHSPs– NEW** Specifies that any GF/GP funds lapsed by CMHSPs are retained in the Community Health budget to improve mental health and substance abuse services.
**Sec. 474. Guardianship for Recipients– NEW** Requires the Department to ensure that each contract with a CMHSP or PIHP requires the CMHSP or PIHP to provide each recipient and his/her family with information regarding the different types of guardianship.
*Sec. 804. Hepatitis C Cooperative Program with Department of Corrections* – NEW Directs the Department to cooperate with Department of Corrections on data and information sharing regarding prisoners being released and Hepatitis C, related to implementation of theMichigan prisoner reentry initiative. Requires a report byApril 1, 2007.
*Sec. 1113. Out-of-Wedlock Pregnancies* – NEW Establishes that funded family planning and pregnancy prevention providers shall discourage sexual activity outside of marriage, and report certain data and expenditures to the Department for an annual report.
*Sec. 1152. Lead Screening for Medicaid Children at WIC Sites* – NEW Establishes that all Medicaid children participating in the special supplemental food program for women, infants, and children receive lead screening testing.
**Sec. 1301. Crime Victim Assistance Services Grant Program– NEW** Establishes criteria for private nonprofit 501(c)(3) organizations for receipt of crime victim assistance services grants, exempting faith-based organizations and groups that provide medical care. Directs the Department regarding types of victims for which services may be supported by the grant funds.
*Sec. 1684. Home and Community-Based Services (HCBS) Administrative Expenses* – MODIFIED Continues the FY 2005-06 requirement that the payment rate allocated for administrative expenses for HCBS waiver program be reduced by $2.00 per person per day, and that savings realized by this action be reallocated to increase enrollment in waiver program. Requires report on the number of nursing home patients discharged who are subsequently enrolled in HCBS waiver program, and associated cost savings.
*Sec. 1690. Establishment of A Long-Term Care Partnership Program* – REPLACED Deletes current law which requires the Department to establish an estate preservation program as per recommendations by Michigan Medicaid Long-Term Care Task Force. Replacement language requires the Department to establish and implement a long-term care partnership program to provide for financing of long-term care.
*Sec. 1700. Actuarially Sound Capitation Rates* – DELETED Requires Department to consult with Michigan Association of Health Plans and develop a plan to assure that Medicaid payment rates to HMOs in FY 2005-06 meet federal requirements for actuarially sound rates; plan shall be submitted by May 30, 2006.
*Sec. 1738. Medicaid Disproportionate Share (DSH) Cap Increase* – NEW Requires the Department to explore ways of increasing the federal cap for DSH payments. If successful in raising the cap, the Department should consider additional DSH funding for county health plans and funding for trauma centers.
*Sec. 1741. Nursing Home Interim Payments* – NEW Requires the Department to continue to provide nursing homes the opportunity to receive interim payments upon their request and that that these payments are as similar to expected cost-settled payments as possible.
*Sec. 1744. Nursing Home Lifting and Transferring Devices* – NEW Requires that for participation in the Medicaid program, nursing homes are to have the appropriate number of freestanding, electric, lifting and transferring.
*Sec. 1748. Medicaid Long-Term Care Medication Management Pilot Project* – NEW Requires the Department to develop a Medicaid long-term care medication management pilot project for Medicaid patients in nursing home settings.
*Sec. 1751. Establishment of DRGs Based on Fee-For-Service and Health Plan Costs* – NEW Requires the Department to provide a report byApril 1, 2007, on establishing Medicaid diagnosis related group rates based on fee-for-service and health plan costs.
*Sec. 1752. Sharing of Third Party Liability Information With Health Plans* – NEW Requires the Department to provide Medicaid health plans with any information that may assist the health plan in determining whether another party may be responsible for the payment of health care benefits.
*Sec. 1758. Illegal Immigrants Who Qualify for Medicaid* – NEW Requires the Department to provide a report byApril 1, 2007, on the number of illegal immigrants who qualify for Medicaid and the annual amount of expenditures on this population.
**Sec. 1761. Hospital QAAP Distribution of Payments Exceeding Upper Payment Limit– NEW** Requires the Department to distribute Medicaid access to care initiative payments (MACI) that exceed hospitals upper payment limits, to hospitals that meet certain conditions, most likely rural hospitals.

Major Boilerplate Changes from FY 2005-06

Sec. 423. Funding for Substance Abuse Programs and Services –MODIFIED

Specifies that the Department establish a workgroup to examine and review the source and expenditure of funds for substance abuse programs and services. Also, requires the workgroup to develop and recommend cost-effective measures for the expenditure of funds and delivery of substance abuse programs and services.

Sec. 450. Audit and Reporting Requirements for CMHSPs –REPLACED

Mandates that the Department implement the recommendations of the workgroup on streamlining the audit and reporting requirements for CMHSPs or specialty prepaid health plans byOctober 1, 2006.

Sec. 460. Uniform Standards for Reporting of Administrative Costs by CMHSPs –REPLACED

Requires the Department to fully implement the uniform definitions, standards, and reporting of administrative costs by prepaid inpatient health plans (PIHPs), CMHSPs, and contracted organized provider systems that receive payment or reimbursements from PIHPs and CMHSPs bySeptember 30, 2007.

Sec. 468. Incorporation of Coordinating Agencies into CMH Authorities –NEW

Requires the Department to recommend changes in its criteria for the incorporation of a city, county, or regional substance abuse coordinating agency into a local community mental health authority.

Sec. 469. Funding Distribution Model for Coordinating Agencies– NEW

Directs the Department to implement a funding distribution model for coordinating agencies based on findings by the former substance abuse block grant workgroup no later thanOctober 31, 2006.

Sec. 470. Integration of Mental Health and Substance Abuse Services– NEW

Specifies that the Department establish written expectations, such as coordination and consolidation of administrative functions, for CMHSPs, PIHPs, coordinating agencies, and counties on the integration of mental health and substance abuse services.

Sec. 471. Administrative Costs for Coordinating Agencies– NEW

Limits administrative costs for coordinating agencies and the Salvation Army Harbor Light Program to a percentage of their total expenditures in FY 2004-05 or 9%, whichever is less.

Sec. 472. Retention of GF/GP by CMHSPs– NEW

Specifies that any GF/GP funds lapsed by CMHSPs are retained in the Community Health budget to improve mental health and substance abuse services.

Sec. 474. Guardianship for Recipients– NEW

Requires the Department to ensure that each contract with a CMHSP or PIHP requires the CMHSP or PIHP to provide each recipient and his/her family with information regarding the different types of guardianship.

Sec. 804. Hepatitis C Cooperative Program with Department of Corrections – NEW

Directs the Department to cooperate with Department of Corrections on data and information sharing regarding prisoners being released and Hepatitis C, related to implementation of theMichigan prisoner reentry initiative. Requires a report byApril 1, 2007.

Sec. 1113. Out-of-Wedlock Pregnancies – NEW

Establishes that funded family planning and pregnancy prevention providers shall discourage sexual activity outside of marriage, and report certain data and expenditures to the Department for an annual report.

Sec. 1152. Lead Screening for Medicaid Children at WIC Sites – NEW

Establishes that all Medicaid children participating in the special supplemental food program for women, infants, and children receive lead screening testing.

Sec. 1301. Crime Victim Assistance Services Grant Program– NEW

Establishes criteria for private nonprofit 501(c)(3) organizations for receipt of crime victim assistance services grants, exempting faith-based organizations and groups that provide medical care. Directs the Department regarding types of victims for which services may be supported by the grant funds.

Sec. 1684. Home and Community-Based Services (HCBS) Administrative Expenses – MODIFIED

Continues the FY 2005-06 requirement that the payment rate allocated for administrative expenses for HCBS waiver program be reduced by $2.00 per person per day, and that savings realized by this action be reallocated to increase enrollment in waiver program. Requires report on the number of nursing home patients discharged who are subsequently enrolled in HCBS waiver program, and associated cost savings.

Sec. 1690. Establishment of A Long-Term Care Partnership Program – REPLACED

Deletes current law which requires the Department to establish an estate preservation program as per recommendations by Michigan Medicaid Long-Term Care Task Force. Replacement language requires the Department to establish and implement a long-term care partnership program to provide for financing of long-term care.

Sec. 1700. Actuarially Sound Capitation Rates – DELETED

Requires Department to consult with Michigan Association of Health Plans and develop a plan to assure that Medicaid payment rates to HMOs in FY 2005-06 meet federal requirements for actuarially sound rates; plan shall be submitted by May 30, 2006.

Sec. 1738. Medicaid Disproportionate Share (DSH) Cap Increase – NEW

Requires the Department to explore ways of increasing the federal cap for DSH payments. If successful in raising the cap, the Department should consider additional DSH funding for county health plans and funding for trauma centers.

Sec. 1741. Nursing Home Interim Payments – NEW

Requires the Department to continue to provide nursing homes the opportunity to receive interim payments upon their request and that that these payments are as similar to expected cost-settled payments as possible.

Sec. 1744. Nursing Home Lifting and Transferring Devices – NEW

Requires that for participation in the Medicaid program, nursing homes are to have the appropriate number of freestanding, electric, lifting and transferring.

Sec. 1748. Medicaid Long-Term Care Medication Management Pilot Project – NEW

Requires the Department to develop a Medicaid long-term care medication management pilot project for Medicaid patients in nursing home settings.

Sec. 1751. Establishment of DRGs Based on Fee-For-Service and Health Plan Costs – NEW

Requires the Department to provide a report byApril 1, 2007, on establishing Medicaid diagnosis related group rates based on fee-for-service and health plan costs.

Sec. 1752. Sharing of Third Party Liability Information With Health Plans – NEW

Requires the Department to provide Medicaid health plans with any information that may assist the health plan in determining whether another party may be responsible for the payment of health care benefits.

Sec. 1758. Illegal Immigrants Who Qualify for Medicaid – NEW

Requires the Department to provide a report byApril 1, 2007, on the number of illegal immigrants who qualify for Medicaid and the annual amount of expenditures on this population.

Sec. 1761. Hospital QAAP Distribution of Payments Exceeding Upper Payment Limit– NEW

Requires the Department to distribute Medicaid access to care initiative payments (MACI) that exceed hospitals upper payment limits, to hospitals that meet certain conditions, most likely rural hospitals.