FY 2016 Appropriation

The federal Centers for Medicare and Medicaid Services (CMS) designates which services in Medicaid are optional. An optional service means that a state does not have to provide the service for most Medicaid clients. These 38 optional services are eligible for the State's federal matching funds. These services include pharmacy, dental, ambulatory surgery, chiropractic, podiatry, physical therapy, vision care, substance abuse treatment, hearing, speech, dialysis clinics, surgical centers, alcohol and drug clinics, intermediate care facilities individuals with intellectual disabilities, personal care, hospice, and private duty nursing. As noted in the Medicaid Mandatory Services section, some of these services may be mandatory for certain populations or in certain settings. While the service as a whole may be optional, once the State elects to offer that service to a specific group, it must make it available to all qualified eligibles in that group. Alternatively, when the State decides to stop or start providing a particular service, it must submit a State Plan Amendment to the Centers for Medicare and Medicaid Services, notify clients thirty days in advance, and provide a public notice at least one day before the change.

Funding History

Funding Issues

New Federal Surplus Property Resale Program

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

During the 2015 General Session, the Legislature appropriated for Fiscal Year 2016, $960,202,000 from all sources for Medicaid Optional Services. This is a 1.8 percent increase from Fiscal Year 2015 revised estimated amounts from all sources. The total includes $123,644,400 from the General/Education Funds, an increase of 16.8 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 Anesthesia Services Medicaid Reimbursement Rates$2,931,300$0
OngoingOne-TimeFinancing Source
$870,000$0General Fund
$2,061,300$0Federal Funds
"Medicaid anesthesia services." Health: "It would be a 30 percent increase for [fee-for-service] and [accountable care organization] providers."
ARRA Adjustments$0$10,775,000
OngoingOne-TimeFinancing Source
$0$10,775,000American Recovery and Reinvestment Act
The Legislature expressed interest in reviewing the federal stimulus or American Reinvestment and Recovery Act (ARRA) money separate from the annual review of federal funds.
Dedicated Credits Increase$2,000$0
OngoingOne-TimeFinancing Source
$2,000$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."
Increase Nursing Home Medicaid Rates$733,900$0
OngoingOne-TimeFinancing Source
$516,100$0Federal Funds
$217,800$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.
Intermediate Care Facilities - Intellectually Disabled Direct Staff Salary$673,900$0
OngoingOne-TimeFinancing Source
$200,000$0General Fund
$473,900$0Federal Funds
"Provider care for the intellectually disabled population. The salaries range from $8.50-$9.35 per hour."
Medicaid Caseload Growth$0$5,350,000
OngoingOne-TimeFinancing Source
$0$5,350,000General 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 ($17,000,000)
OngoingOne-TimeFinancing Source
$0 ($17,000,000)General 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 Dental Reimbursement Rates$6,738,500$0
OngoingOne-TimeFinancing Source
$2,000,000$0General Fund
$4,738,500$0Federal Funds
"Increase reimbursement rates to pediatric dental providers." A $2 million ongoing General Fund increase would raise rates about 12%.
Pilot Program for Assistance for Children with Disabilities and Complex Medical Conditions$0$10,835,600
OngoingOne-TimeFinancing Source
$0$3,216,000General Fund, One-time
$0$7,619,600Federal Funds
"This bill directs the Department of Health to apply for a Medicaid waiver for children with disabilities and complex medical conditions." How Measure Success? "Waiver services will be less costly than costs that would have been incurred if the child was served in a nursing facility." Fiscal Note: $3,333,600 ongoing; ($940,100) one-time GF
Portability - Transfer IN - DOH to DHS ($340,400)$0
OngoingOne-TimeFinancing Source
($340,400)$0General Fund
Transfer ongoing General Fund of $1,466,000 for portability and transition programs beginning in FY 2015 from the Department of Health's Medicaid Optional Services to the Department of Human Services' Division of Services for People with Disabilities. The clients associated with the funding have already transferred from Health to Human Services. This adjustment facilitates the funding following the person. Both the Department of Health and the Department of Human Services agree with this transfer.
Technology Dependent Waiver Capacity Expansion$1,054,900$0
OngoingOne-TimeFinancing Source
$313,100$0General Fund
$741,800$0Federal Funds
this will fund 10 of the 75 Medicaid individuals on the waiting list for this waiver. The 10 to be served are chosen based on severity of needs and duration of time on the waiting list. The Department of Health indicates that these individuals are being served currently in higher cost settings and are not all on Medicaid, but there will be no savings from expanding the waiver as the agency estimates new individuals to take up the higher cost settings freed up by new waiver clients. The waiver currently serves about 110 individuals. The waiver allows parental income to be excluded when determining an individual's eligibility for Medicaid. About 75% of the 10 individual's costs will be for regular Medicaid services and 25% for the waiver costs. How Measure Success? Count and cost of new individuals enrolled (via annual cost effectiveness report to federal government).

Cumulative State General Funds Saved Through Preferred Drug List

Cumulative State General Funds Saved Through Preferred Drug List

New Choices Waiver Clients Coming Out of Nursing Homes Into Community Based Care

Emergency Dental Program General Fund Savings

Emergency Dental Program General Fund Savings

New Choices Waiver Clients Coming Out of Nursing Homes Into Community Based Care

Cumulative State General Funds Saved Through Preferred Drug List

New Choices Waiver Clients Coming Out of Nursing Homes Into Community Based Care

Statute

Medicaid Optional Services is governed by several chapters of the Utah Health Code in Title 26 of the Utah Code.

  • 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 26-18-2.4(1)(c) Preferred Drug List -- try preferred drugs first for certain drug classes unless the prescribing physician obtains prior approval.
  • UCA 26-18-2.6 requires the Department to bid out dental services via 100% risk-based contracts at least once every five years.
  • UCA 26-18-3.5 describes the functions of the Primary Care Network and Utah's Premium Partnership for Health Insurance.
  • UCA 26-18-105 authorizes the Drug Utilization Review Board which reviews prescription drugs for creating a prior approval requirement.
  • UCA 26-18-604 requires the Department of Health to keep pharmacy costs as low as possible through an annual review of all drug prices as well as checking the availability of generics.
  • UCA 26-19 authorizes the Department of Health to recover Medicaid benefits paid by the Division from third parties, including estates and trusts.
  • UCA 58-17b-606(4) requires pharmacists to use generic drugs, when available, for clients served by the Department of Health in most cases unless the prescribing physician obtains prior approval for a brand name drug or the name brand drug costs less.

There are 11 optional services that Utah does not provide in its Medicaid program: adult dental services, home health occupational therapy; home health speech and language; eyeglasses; home health audiology; speech, hearing and language; nurse anesthetist; chiropractor; Program of All-Inclusive Care for the Elderly; respiratory care; and qualified Religious Nonmedical Health Care Institutions.

There are 12 programs within the Medicaid Optional Services line item: Capitated Mental Health Services, Pharmacy, Non-service Expenses, Home and Community Based Waivers Services, Dental Services, Intermediate Care Facilities for Individuals with Intellectual Disabilities, Buy-in/Buy-out, Hospice Care Services, Vision Care, Disproportionate Share Hospital Payments, Clawback Payments, and Other Optional Services. Medicaid Optional Services also includes the Primary Care Network and Utah's Premium Partnership for Health Insurance.

The Division of Aging and Adult Services has a Medicaid waiver to pay for some services in home and community-based settings. The waiver diverts some elderly people from nursing facility care. The waiver has an enrollment cap and maintains a waiting list for those seeking to receive services. Based on a needs assessment, an individual may receive some or all of the following services: adult companion, adult day health, case management, chores, emergency response systems, environmental accessibility adaptations, fiscal management, home delivered supplemental meals, homemaker, medication reminder systems, non-medical transportation, personal attendant program training, personal attendant, respite care, specialized medical equipment, and supportive maintenance home health aide.

Historically, the Legislature has directed the Department of Human Services to maximize federal funds, often through accessing Medicaid for Human Services when possible. Certain services and clients of the Department of Human Services qualify for funding under the Medicaid Program. Some of the programs that receive Medicaid funding are: the Utah State Hospital, the Utah State Developmental Center, Home and Community Based Waivers in the Divisions of Aging and Adult Services, Services for People with Disabilities, Juvenile Justice Services, and Child and Family Services.

Medicaid Work Incentive Program

Utah has opted to cover individuals with disabilities who are working through the Medicaid program. The program is called the Medicaid Work Incentive Program. To qualify an individual with disabilities who is working can have countable income up to 250% of the Federal Poverty Level. Countable income generally is half of all earned income. Based on the individuals' income, they pay the following percentage of their countable income in exchange for Medicaid services:

Intent Language

SB0002: Item 75

The Legislature intends that with the funding appropriated for the building block titled, "Intermediate Care Facilities - Intellectually Disabled," the Department of Health shall: 1) Direct funds to increase the salaries of direct care workers; 2) Increase only those rates which include a direct care service component, including respite; 3) Monitor providers to ensure that all funds appropriated are applied to direct care worker wages and that none of the funding goes to administrative functions or provider profits; In conjunction with Intermediate Care Facilities - Intellectually Disabled providers, report to the Office of the Legislature Fiscal Analyst no later than September 1, 2015 regarding: 1) the implementation and status of increasing salaries for direct care workers, 2) a detailed explanation with supporting documentation of how Intermediate Care Facilities - Intellectually Disabled providers are reimbursed, including all accounting codes used and the previous and current rates for each accounting code, and 3) a conceptual explanation of how Intermediate Care Facilities - Intellectually Disabled providers realize profit within the closed market of providing Intermediate Care Facilities - Intellectually Disabled services.


SB0002: Item 75

The Legislature intends that, if funds are available, Medicaid fee-for-service payments for anesthesia services be increased from the current amount of $18.27 to $23.73 for Fiscal Year 2016.


SB0002: Item 75

The Legislature intends that 5% of all funds provided in the Medicaid program for managed care dental plans be used for contracted plan administration and that any funds provided for the Affordable are Act premium tax not be included in that 5% administrative funds amount.


SB0003: Item 123

Under Section 63J-1-603 of the Utah Code the Legislature intends that up to $3,216,000 of the appropriations provided for the Medicaid Optional Services line item not lapse at the close of Fiscal Year 2016. The use of any nonlapsing funds is limited to a pilot program for assistance for children with disabilities and complex medical conditions to be used in similar amounts over three years with the goal of serving a similar number of clients over three years.


SB0007S01: Item 6

The Legislature intends that the Department of Health report on the following performance measures for the Medicaid Optional Services line item: (1) annual state general funds saved through preferred drug list (Target = $8.5 million general fund or more), (2) count of new choices waiver clients coming out of nursing homes into community based care (Target = 390 or more), and (3) emergency dental program savings (Target = $250,000 General Fund savings or more) by January 1, 2016 to the Social Services Appropriations Subcommittee.


SB0007S01: Item 18

The Legislature intends that the Department of Health report on the following performance measures for the Medicaid Optional Services line item: (1) annual state general funds saved through preferred drug list (Target = $8.5 million general fund or more), (2) count of new choices waiver clients coming out of nursing homes into community based care (Target = 390 or more), and (3) emergency dental program savings (Target = $250,000 General Fund savings or more) by January 1, 2016 to the Social Services Appropriations Subcommittee.


For analysis of current budget requests and discussion of issues related to this budget click here.

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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.