Synopsis As Introduced Amends the State Finance Act. Provides that certain payments for medical and child care services may be paid out of appropriations for those purposes for a fiscal year if the services were rendered in that fiscal year (now, without regard to the fiscal year in which rendered). Allows payment during a 4-month lapse period after the end of the fiscal year. Effective July 1, 2008.
House Committee Amendment No. 1 Provides that payments for pharmaceutical services (in addition to medical services) rendered during a fiscal year may be paid by specified Departments out of expiring appropriations during the 4-month period ending at the close of business on October 31.
State Debt Impact Note, House Committee Amendment No. 1 (Government Forecasting & Accountability)
HB 3397 (H-AM 1) would not change the amount of authorization for any type of State-issued or State-supported bond, and, therefore, would not affect the level of State indebtedness.
Fiscal Note (The Department of Veterans' Affairs)
The Department of Veterans' Affairs is not able to determine a reliable dollar estimate for the impact of HB 3397. HB 3397 limits medical payments for services rendered in the fiscal year to be paid from the Department of Veterans' Affairs appropriations for those purposes for that fiscal year, out of the expiring appropriations during the four-month period ending at the close of business on October 31. The Department of Veterans' Affairs provides medical services for veteran residents of the four Illinois Veterans' Homes. The volume of medical services provided to the residents will not change because of this legislation. The number of medical service payments that are not paid within a four-month period cannot be immediately nor readily determined without manual research of each medical service payment made from each Veterans' Home. There are many steps to process medical services invoices including primary and secondary insurance billing as well as Medicare billing. This is a time consuming process. The anticipated effect of this legislation on the Department of Veterans' Affairs is that medical services provider payments will be further delayed by having to obtain payment through the Court of Claims after the four-month lapse period. There may be some additional administrative overhead cost to IDVA filing and monitoring claims at the Court of Claims. The Department of Veterans' Affairs is concerned that additional delay in medical service payment may adversely affect the willingness of medical service providers to provide medical services to the Veterans' Homes residents. There may be some additional cost associated with obtaining alternative medical providers. In addition, GAAP reporting for the agency is required to be complete at the end of the two-month lapse period in August for each fiscal year by the Illinois Office of the Comptroller. The agency will not be able to complete GAAP reporting for the fiscal year by the end of August if medical payments for the fiscal year may be processed through October and must be processed within the fiscal year when the medical services were provided.
Fiscal Note, House Committee Amendment No. 1 (Dept. of Central Management Services)
The Department of Central Management Services estimates no significant fiscal impact.
Fiscal Note, House Committee Amendment No. 1 (Dept. of Human Services)
The Department of Human Services would be impacted by this bill in the areas of the Division of Alcoholism and Substance Abuse, Medicaid, Early Intervention, Developmental Disabilities Long Term Care and Child Care services. The amount of liability carried forward in a fiscal year varies, however, the fiscal impact to DHS programs would be over $100 million.
Fiscal Note (Office of the Comptroller)
Beginning with the close of fiscal year 2009, HB 3397 would prohibit State liabilities for medical and pharmaceutical bills from being rolled over into the next fiscal year. The latest publication of the Comptroller's Annual Financial Comprehensive Report revealed that over $2.3 billion in liabilities were deferred from fiscal year 2006 into the current 2007 fiscal year. This legislation essentially requires a full accounting of appropriation costs of the State's medical programs and requires the timely processing of medical claims within the 4-month lapse period. As such, there is no net fiscal impact to the State since the same amount of medical liabilities will be paid. This legislation does not create or diminish medical liabilities but rather changes the timing when liabilities are paid and the fiscal year in which payment of such liabilities are accounted for or changed. The cost of not enacting such provisions in law would permit State government to operate under the status quo of delayed payments to medical and pharmaceutical providers, late interest penalties, limited accessibility to Medicaid providers, unbalanced budgets, and an overall negative impact to the cash management practices that cause delay in other essential payments made by the State.
Fiscal Note, House Committee Amendment No. 1 (Dept. of Healthcare & Family Services)
If this legislation passes, the Department will no longer be able to pay for prior year services out of the current year appropriation. It requires medical assistance payments to be made from the fiscal year appropriation related to the time in which the service was rendered. The bill will extend the lapse period for medical assistance to October 31 unless it is during the four-month lapse period, during which HFS could use expiring appropriations to pay prior year medical claims. Providers currently have one year to bill HFS for services, so an extension of the lapse period from two months to four is still problematic. A likely unintended result of this bill would be to greatly increase the number of cases before the Court of Claims since many medical bills will be received after October 31. Despite the timing of provider billings issue, this legislation could also impose hardship on medical providers by requiring them to go to the Court of Claims in instances where HFS appropriations are exhausted prior to payment of all fiscal year liabilities. HFS medical assistance budgets are based upon estimated eligible clients and utilization patterns. As such, they are unlike normal operations budgets whereby agencies simply curtail purchases/expenditures to stay within their budget. In medical assistance, HFS must pay the proper claims of everyone that meets eligibility requirements regardless of annual appropriation levels.