FY 2016 Appropriation

Medicaid is a joint federal/state entitlement service consisting of three programs that provide health care to selected low-income populations: (1) a health insurance program for low-income parents (mostly mothers) and children; (2) a long-term care program for the elderly; and (3) a services program to people with disabilities. Overall, Medicaid is an "optional" program, one that a state can elect to offer; however, if a state offers the program, it must abide by strict federal regulations. It also becomes an entitlement program for qualified individuals; that is, anyone who meets specific eligibility criteria is "entitled" to Medicaid services. The federal government establishes and monitors certain requirements concerning funding, and establishes standards for quality and scope of medical services. Medicaid includes requirements to provide certain services and to serve specific populations. States may expand their program to cover additional "optional" services and/or "optional" populations. In addition, states have some flexibility in determining certain aspects of their own programs in the areas of eligibility, reimbursement rates, benefits, and service delivery. As long as services meet State and federal standards, the federal government will provide a match for all State money spent on Medicaid. The match is known as the Federal Medical Assistance Percentage (FMAP). The entire Medicaid program is based upon an approved contract with the federal government, known as the State Plan. The federal government must approve all changes and/or amendments to the State Plan. If the State were to provide a service without federal approval, then the State would pay 100% of the costs rather than the usual federal match.

Funding History

Funding Issues

Dedicated Credits Increase

(1) An increase of $802,200 in dedicated credits in FY 2016 in the Department of Health's Executive Director's Operations line item for $383,700 for potential sales from five new products from the All Payer Claims Database, $250,000 for contract for implementing the Master Person Index, and $168,500 for increased fees in vital records to offset declines in fee quantities. (2) An increase of $10,002,000 in dedicated credits in FY 2016 in the Department of Health's Medicaid Mandatory Services line item which is just a shift from the Medicaid Optional Services line item, but no overall increases for dedicated credits in Medicaid services. (3) $27,500 in ongoing dedicated credits beginning in FY 2016 for the Department of Health for a new federal surplus resale program where state agencies can receive dedicated credits from the sale of property/equipment. (4) For the Department of Health's Disease and Prevention Control line item as dedicated credits - Health: "Grant from the Association of Public Health Laboratories for $148,100. The purpose of this proposal is to establish molecular testing (Severe Combined Immunodeficiency) within the Utah Public Health Laboratory. Through this mechanism we explore and implement a cross-testing section process to advance Newborn Screening and the Infectious Disease group. The grant finances research and development work to implement a mandated test. All future cost will be covered completely through revenue generated through test fees."

Medicaid Caseload Growth

The following areas create costs for the state in Medicaid in FY 2016: (1) estimated increase of 1,900 or 1% clients in FY 2016, (2) $3.9 million for a 2% projected increase in accountable care organization contracts starting in January 2016, (3) $3.0 million for a new federal regulation to provide autism spectrum disorder-related services when medically necessary up to age 21, and (4) $3.1 million for cost increases over which the state has no control due to federal regulation or has opted not to exercise more state control. FY 2014 ended and FY 2015 will likely end under budget which reduces the baseline costs for FY 2016. How Measure Success? HEDIS measures (https://health.utah.gov/myhealthcare/reports/hedis) for access to care and how much appropriate care was received.

Medicaid Management Information System Replacement

Money is for final phases for the replacement of the Medicaid Management Information System. (The Governor had $3.5 million in his budget). The replacement should be complete in FY 2017. How Measure Success? (once project completed) (1) the timeliness and accuracy of processed claims and (2) the amount of time to enroll a new Medicaid provider

New Federal Surplus Property Resale Program

New federal surplus resale program where state agencies can receive dedicated credits from the sale of property/equipment.

Tax on Medicaid and CHIP Health Plans From Federal Health Care Reform

The contracted Medicaid and CHIP health plans for Utah will have about a $3.3 million ongoing cost to them of new taxes as part of federal health care reform. The State has the option to pay this on their behalf and receive the normal state/federal match rate of 30% state and 70% federal. The cost started in January 2014. How Measure Success? Report on distribution of reimbursement of the provider tax.
Appropriation Overview

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $1,487,594,700 from all sources for Medicaid Mandatory Services. This is a 4.8 percent increase from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $305,854,100 from the General/Education Funds, an increase of 6 percent from revised Fiscal Year 2015 estimates.

Appropriation Adjustments

In addition to statewide compensation and internal service fund cost increases, the following appropriation adjustments were made during the 2015 General Session:

DescriptionOngoingOne-Time Accountable Care Organization Administrative Fee$5,390,800$0
OngoingOne-TimeFinancing Source
$1,600,000$0General Fund
$3,790,800$0Federal Funds
Accountable Care Organization Administrative Fee increase from 8.3% to 9%, which is $2M.
Dedicated Credits Increase$10,004,000$0
OngoingOne-TimeFinancing Source
$10,004,000$0Dedicated Credits Revenue
(1) An increase of $802,200 in dedicated credits in FY 2016 in the Department of Health's Executive Director's Operations line item for $383,700 for potential sales from five new products from the All Payer Claims Database, $250,000 for contract for implementing the Master Person Index, and $168,500 for increased fees in vital records to offset declines in fee quantities. (2) An increase of $10,002,000 in dedicated credits in FY 2016 in the Department of Health's Medicaid Mandatory Services line item which is just a shift from the Medicaid Optional Services line item, but no overall increases for dedicated credits in Medicaid services. (3) $27,500 in ongoing dedicated credits beginning in FY 2016 for the Department of Health for a new federal surplus resale program where state agencies can receive dedicated credits from the sale of property/equipment. (4) For the Department of Health's Disease and Prevention Control line item as dedicated credits - Health: "Grant from the Association of Public Health Laboratories for $148,100. The purpose of this proposal is to establish molecular testing (Severe Combined Immunodeficiency) within the Utah Public Health Laboratory. Through this mechanism we explore and implement a cross-testing section process to advance Newborn Screening and the Infectious Disease group. The grant finances research and development work to implement a mandated test. All future cost will be covered completely through revenue generated through test fees."
Emergency Medical Services Amendments$7,502,100$0
OngoingOne-TimeFinancing Source
$7,502,100$0Federal Funds
Enacting this bill could increase revenue to a new expendable special revenue fund by $3,217,400 ongoing beginning in FY 2016 and may increase federal funds received by $7,502,100 ongoing beginning in FY 2016. Enactment of this legislation may cost the Department of Health $3,217,400 in expendable special revenue funds and $7,502,100 federal funds annually beginning in FY 2016. These costs are $40,000 for staff and $10,679,500 for increased reimbursement payments to Medicaid providers of ambulance transportation.
Increase Nursing Home Medicaid Rates$12,542,100$0
OngoingOne-TimeFinancing Source
$8,819,600$0Federal Funds
$3,722,500$0GFR - Nursing Care Facilities Account
Increase Nursing Home Medicaid Rates - The Legislature provided $2 million one-time in FY 2015 to raise nursing home rates 3.6% in Medicaid. This funding would make that rate increase ongoing. In order to keep the cost neutral for the State $110,600 of the appropriation would be used for the increased cost to the State for hospice costs. The number of Medicaid clients in nursing homes has declined annually from a high of 3,130 in FY 2011 to 2,938 clients in FY 2014. This is a decline of 6.1% or 192 clients. How Measure Success? Report on rates implemented.
Medicaid Accountable Care Organizations Into Rural Counties$0$11,118,600
OngoingOne-TimeFinancing Source
$0$3,300,000General Fund, One-time
$0$7,818,600Federal Funds
This one-time cost would cover the claims would come in for up to 18 months under the old fee-for-service system while the State was also prepaying monthly premiums. This would expand Medicaid accountable care organizations into the following counties: Box Elder, Cache, Iron, Summit, Tooele, and Washington. This would take the percentage of Medicaid clients served via accountable care organizations from 70% to 88%. How Measure Success? Keep the Medicaid cost growth rate below the General Fund growth rate.
Medicaid Caseload Growth$0$2,850,000
OngoingOne-TimeFinancing Source
$0$2,850,000General Fund, One-time
The following areas create costs for the state in Medicaid in FY 2016: (1) estimated increase of 1,900 or 1% clients in FY 2016, (2) $3.9 million for a 2% projected increase in accountable care organization contracts starting in January 2016, (3) $3.0 million for a new federal regulation to provide autism spectrum disorder-related services when medically necessary up to age 21, and (4) $3.1 million for cost increases over which the state has no control due to federal regulation or has opted not to exercise more state control. FY 2014 ended and FY 2015 will likely end under budget which reduces the baseline costs for FY 2016. How Measure Success? HEDIS measures (https://health.utah.gov/myhealthcare/reports/hedis) for access to care and how much appropriate care was received.
Medicaid Caseload Reduction$0$4,100,000
OngoingOne-TimeFinancing Source
$0$4,100,000General Fund, One-time
The following areas create costs for the state in Medicaid in FY 2016: (1) estimated increase of 1,900 or 1% clients in FY 2016, (2) $3.9 million for a 2% projected increase in accountable care organization contracts starting in January 2016, (3) $3.0 million for a new federal regulation to provide autism spectrum disorder-related services when medically necessary up to age 21, and (4) $3.1 million for cost increases over which the state has no control due to federal regulation or has opted not to exercise more state control. FY 2014 ended and FY 2015 will likely end under budget which reduces the baseline costs for FY 2016.
Medicaid Management Information System Replacement$0$50,500,000
OngoingOne-TimeFinancing Source
$0$5,050,000General Fund, One-time
$0$45,450,000Federal Funds
Money is for final phases for the replacement of the Medicaid Management Information System. (The Governor had $3.5 million in his budget). The replacement should be complete in FY 2017. How Measure Success? (once project completed) (1) the timeliness and accuracy of processed claims and (2) the amount of time to enroll a new Medicaid provider
Medicaid Physician Reimbursement Rates$8,423,200$8,423,200
OngoingOne-TimeFinancing Source
$2,500,000$0General Fund
$0$2,500,000General Fund, One-time
$5,923,200$5,923,200Federal Funds
Utah Medical Association: "Description is that funding flows through the DOH to the Medicaid insurance plans to the physicians to keep reimbursement rates at Medicaid reimbursement rates at for Primary care providers at Medicare rates which are still less than 70% of commercial rates but much higher than Medicaid rates were before the federal government bumped primary care rates up for two years." Health: "The $6 million figure would increase rates about 22% and be about 1.5% short of Medicare rates...$6.3 million in [General Fund] is needed to get the entire way there."
Tax on Medicaid and CHIP Health Plans From Federal Health Care Reform$10,983,800$967,000
OngoingOne-TimeFinancing Source
$3,260,000$0General Fund
$0$287,000General Fund, One-time
$7,723,800$680,000Federal Funds
The contracted Medicaid and CHIP health plans for Utah will have about a $3.3 million ongoing cost to them of new taxes as part of federal health care reform. The State has the option to pay this on their behalf and receive the normal state/federal match rate of 30% state and 70% federal. The cost started in January 2014. How Measure Success? Report on distribution of reimbursement of the provider tax.
Use 3% Maximum from Nursing Restricted Account for Administration ($12,300) ($12,300)
OngoingOne-TimeFinancing Source
($12,300) ($12,300)GFR - Nursing Care Facilities Account
By statute 3% of the Nursing Care Facilities Account can be used for administration. The account was recently increased in FY 2014 and the administration is not currently at 3%. The reduction represents an exchange of these restricted account funds for General Fund and takes the State to using 3% on administration based on projected collections.

Additional Measures

Percentage of Children (Less Than 15 Months Old) That Received at Least Six or More Well-child Visits

Percentage of Children (Less Than 15 Months Old) That Received at Least Six or More Well-child Visits

Percentage of Deliveries That Had a Postpartum Visit on or Between 21 and 56 Days After Delivery

Percentage of Deliveries That Had a Postpartum Visit on or Between 21 and 56 Days After Delivery

Percentage of Members (12 - 21 Years of Age) Who Had at Least One Comprehensive Well-care Visit

Percentage of Members (12 - 21 Years of Age) Who Had at Least One Comprehensive Well-care Visit

Percentage of Members 45 to 64 Who Had an Ambulatory or Preventative Care Visit

Percentage of Members 45 to 64 Who Had an Ambulatory or Preventative Care Visit

Statute

Several chapters of the Utah Health Code in Title 26 of the Utah Code govern Medicaid Mandatory Services.

  • UCA 26-18 establishes the Medical Assistance Program, commonly referred to as Medicaid and its administrative arm, the Division of Medicaid and Health Financing.
  • UCA 26-19 authorizes the Department to recover Medicaid benefits paid by the Division from third parties, including estates and trusts.
  • UCA 26-35a creates the Nursing Care Facilities Account and levies an assessment on the owners of nursing care facilities to generate seed money which draws down additional federal funds for the operation of those facilities. The law also requires the State, at a minimum, to maintain State-funded expenditures paid to nursing care facilities at June 2004 levels.
  • UCA 26-36a establishes a hospital assessment via a restricted special revenue fund.

Most providers for Medicaid must meet Medicare provider requirements to receive reimbursement for serving Medicaid clients. Additionally, they must accept Medicaid reimbursement as payment in full. The provider may charge the patient for services not covered by Medicaid only when the provider has advised the patient in advance that Medicaid does not cover the services and the patient has agreed in writing to pay for the services. Medicaid does not pay for any services not considered medically necessary.

The client's Medicaid Identification Card will state when a co-pay is required and for what type of service. Pregnant women and children are not subject to the co-pay requirement. The provider is responsible to collect the co-pay at the time of service or bill the client. The total amount paid to the provider reflects the amount of the client's co-pay. For a list of co-pays by service please visit http://health.utah.gov/umb/forms/pdf/adultcomp.pdf.

There are currently 57 services included in the entire Medicaid Program. Of these, inpatient hospital, outpatient hospital, intermediate care facilities for individuals with intellectual disabilities, long-term care, physician, dental, pharmacy, and health maintenance organizations make up over 75 percent of all Medicaid expenditures. Medicaid services in Utah are in two budgetary line items: Medicaid Mandatory Services and Medicaid Optional Services. The line dividing mandatory and optional services is occasionally blurred by the fact that some optional services are mandatory for specific populations or in specific settings. For example, the federal government requires more services for children and pregnant women. Additionally, clients in institutionalized settings receive a wider range of services. The State's flexibility includes federal waivers that allow some latitude in program implementation, as well as to offer some additional optional services.

Mandatory services in the Medicaid Program come from decisions by the federal government regarding required services. These include: inpatient and outpatient hospital, physician services, skilled and intermediate care nursing facilities, medical transportation, home health, nurse midwife, pregnancy-related services, lab and radiology, kidney dialysis, Early Periodic Screening Diagnosis and Treatment, and special reimbursement to community and rural health centers. The federal government requires the State to pay Medicare premiums and co-insurance deductibles for aged, blind, and disabled persons with incomes up to 100 percent of the Federal Poverty Level. Additionally, the State pays for Medicare premiums for two other groups of qualifying individuals: (1) those with incomes up to 120 percent of the Federal Poverty Level and (2) and those with incomes between 121 and 135 percent of the Federal Poverty Level.

There are nine budget programs within the Medicaid Mandatory Services line item, which include: Inpatient Hospital, Contracted Health Plans, Nursing Home, Outpatient Hospital, Physician Services, Other Mandatory Services, Crossover Services, Medical Supplies, and State-run Primary Care Case Management.

The Early Periodic Screening Diagnosis and Treatment Program, called Child Health Evaluation and Care in Utah, is a mandatory federal program which requires the State to screen all Medicaid children up to age 21 at scheduled intervals. The mandate includes providing all medically necessary services, such as organ transplants or any other service needed, regardless of cost or if it is normally covered by Medicaid. Utah's 12 local health departments provide the federally-required education and outreach for this program.

The State has designated five major population groupings that may receive health care from the Medicaid Program. These include: (1) aged - the elderly or disabled who receive federal Supplemental Security Income (SSI) and persons in nursing facilities (grouped together as aged), (2) blind and disabled individuals, (3) children who receive Temporary Assistance for Needy Families (TANF) benefits, or are in the Foster Care program, (4) TANF adults with dependent children, and (5) pregnant women. Each of these groups is discussed in more detail later in this section.

Aged

Individuals aged 65 and over qualify for Medicaid if they qualify for SSI, which provides an income of approximately 77.6 percent of the Federal Poverty Level (FPL). They also qualify for food stamps. Many of the elderly also qualify for Medicare coverage. The Medicaid Program pays for the premiums and deductibles for those eligible under both programs. Medicare pays the actual medical cost for most of these people. Medicaid is also required to pay Medicare premiums, co-insurance, and deductibles for anyone qualifying for Medicare who has income up to 100 percent of FPL, but only has to pay Medicare premiums for those between 100 and 135 percent of FPL.

Medicaid also covers non-SSI aged people whose income does not exceed 100 percent of FPL. Aged people with income over 100 percent of FPL can spend down to the Medically Needy Income Limit (100% of FPL) to receive Medicaid.

Blind and Disabled

Persons with disabilities are eligible for services under the Medicaid Program. The criteria for disability require that a person be unable to participate in gainful activity for at least a year, or have a medical condition that will result in death. Among the disabilities covered are mental retardation, blindness, mental health, spinal injury, and AIDS. Income is limited to 100 percent of the Federal Poverty Level. There is an asset limit of $3,000 for families. The asset limit does not include a primary residence or a car. Eligible individuals also qualify for food stamps.

Children

Aid to Families with Dependent Children (AFDC) was a joint federal-state program which provided financial assistance to families with children deprived of the support of at least one parent. In 1996, AFDC was replaced with block grants to the states and the Temporary Assistance to Needy Families (TANF). In general, people who meet AFDC eligibility criteria that were in effect on July 16, 1996 are eligible for Medicaid. Also, those people who qualify for a TANF grant may be eligible for Medicaid.

The Medically Needy Children program is for children who do not qualify for assistance under normal Family Medicaid because they still have the support of a parent. The family may spend down to become eligible. This is an optional group not required by the federal government. Many children previously eligible for the Medically Needy Children program have become eligible in the mandatory programs for children.

In addition to the previously mentioned TANF children, there are three groups of children covered under the Medicaid Program. These are: (1) medically needy children, (2) children up to age 18 with family income up to 133 percent of the Federal Poverty Level (FPL), and (3) children in subsidized adoptions.

There is no asset test for children applying for Medicaid.

Children in Foster Care are eligible for Medicaid coverage if they meet Medicaid Program requirements. The State is responsible for their medical care. Most children placed in foster care have histories of abuse or neglect. Often there are unresolved medical and mental health problems. Each year, a number of children come into the custody of the State and are placed for adoption. Some of these children have serious medical problems which makes them hard to place. In some of these cases, the State subsidizes the adoption. Some families receive a small stipend to assist in the cost of care for these children, and the State covers the child's medical care under Medicaid until the child is 18 years old. Children that age out of foster care, regardless of income and assets, receive Medicaid services until they turn 26 through the Independent Living Program, unless they are eligible for another Medicaid program.

TANF Adults

The group referred to as TANF Adults includes those adults with dependent children who are either categorically or medically needy and meet the basic program requirements. Some of the individuals may need to "spend down" to obtain Medicaid services, which means that they must reduce their disposable income with payments to Medicaid or with medical bills which they have incurred.

There are two groups of people who qualify for Medicaid under the TANF Program. These include: (1) those in the basic program where a child lacks the support of one parent, and (2) those in two-parent families that qualify under the unemployed parent program. The majority of eligible families are deprived because of divorce, desertion, or unwed mothers. TANF families may also qualify for food stamps. Depending on family size, the TANF grant and food stamps provide an income between 62 and 74 percent of the Federal Poverty Level.

In addition to the basic Family Employment Program (FEP), there is also a program for unemployed two-parent families. This program provides cash assistance for seven months in any 13-month period. One parent in families in this program is required to work 32 hours a week (in an emergency work program) and spend at least 8 hours per week seeking regular employment. With the exception of the time limitation and work requirement, the criteria and benefits for the Family Employment Program - Two Parent are the same as those for the regular FEP. Federal law requires that the family be eligible for Medicaid for the full 12 months of the year. Besides those eligible through FEP cash assistance, there are several programs which provide transitional Medicaid coverage for periods of 4 months (for child support-related eligibles) or 24 months (for people who no longer receive cash assistance due to child support payments or earnings).

Pregnant Women

The prenatal/pregnancy program helps pregnant women receive prenatal care. The program covers the mother from the time of application to 60 days after the birth. A woman only needs to meet the eligibility requirements in any one month to be eligible for the balance of the pregnancy. Children born to women on this program are eligible for Medicaid (after the first 60 days) for the rest of the first year under the postnatal program.

Intent Language

HB0003: Item 81

Under Section 63J-1-603 of the Utah Code, the Legislature intends up to $3,500,000 provided for the Department of Health's Medicaid Management Information System Replacement in Item 72 of Chapter 282, Laws of Utah 2014 shall not lapse at the close of Fiscal Year 2015. The use of any nonlapsing funds is limited to the redesign and replacement of the Medicaid Management Information System.


SB0003: Item 121

The Legislature intends that the Medicaid Accountable Care Organizations receive a scheduled two percent increase effective January 1, 2016 consistent with the intent of S.B. 180, 2011 General Session.


SB0007S01: Item 5

The Legislature intends that the Department of Health report quarterly to the Office of the Legislative Fiscal Analyst on the status of replacing the Medicaid Management Information System replacement beginning September 30, 2015. The reports should include, where applicable, the responses to any requests for proposals. At least one report during FY 2016 should include the first estimate of net ongoing impacts to the State from the new system.


SB0007S01: Item 5

The Legislature intends that the Department of Health report on the following performance measures for the Medicaid Mandatory Services line item: (1) percent of adults age 45-64 with ambulatory or preventive care visits (Target = 88% or more), (2) percent of deliveries that had a post partum visit between 21 and 56 days after delivery (Target = 60% or more), and (3) percent of customers satisfied with their managed care plan (Target = 85% or more) by January 1, 2016 to the Social Services Appropriations Subcommittee.


SB0007S01: Item 17

The Legislature intends that the Department of Health report quarterly to the Office of the Legislative Fiscal Analyst on the status of replacing the Medicaid Management Information System replacement beginning September 30, 2015. The reports should include, where applicable, the responses to any requests for proposals. At least one report during FY 2016 should include the first estimate of net ongoing impacts to the State from the new system.


SB0007S01: Item 17

The Legislature intends that the Department of Health report on the following performance measures for the Medicaid Mandatory Services line item: (1) percent of adults age 45-64 with ambulatory or preventive care visits (Target = 88% or more), (2) percent of deliveries that had a post partum visit between 21 and 56 days after delivery (Target = 60% or more), and (3) percent of customers satisfied with their managed care plan (Target = 85% or more) by January 1, 2016 to the Social Services Appropriations Subcommittee.


Because of the Department's budget reorganization in FY 2011, some of the detail between FY 2010 and FY 2011 nonlapsing balances does not tie out by line item. For analysis of current budget requests and discussion of issues related to this budget click here.

The source of finance entitled "Transfers - Medicaid - UDC" is for state match from the Department of Corrections for Medicaid-eligible inmates who receive hospital inpatient services.

Display By:
Appropriation Type:
Appropriation History by
Show Table   |   Show Additional Information

COBI contains unaudited data as presented to the Legislature by state agencies at the time of publication. For audited financial data see the State of Utah's Comprehensive Annual Financial Reports.