Bill Summary – FastDemocracy

LEGISLATIVE FISCAL ESTIMATE
                                SENATE, No. 2535
                             STATE OF NEW JERSEY
                               221st LEGISLATURE
                                             DATED: JUNE 28, 2024
                                                  SUMMARY
    Synopsis:                   Establishes minimum Medicaid reimbursement rate for structured day
                                program services provided to beneficiary eligible for brain injury
                                services.
    Type of Impact:             Annual Increase in State Costs and Revenue.
    Agencies Affected:          Department of Human Services.
                                       Office of Legislative Services Estimate
    Fiscal Impact                                           Year 1 and Thereafter
    State Cost Increase                                   $5.7 million to $15.2 million
    State Revenue Increase                                 $2.8 million to $7.6 million
    The Office of Legislative Services (OLS) concludes that the Department of Human Services
     will incur between $5.7 million and $15.2 million in additional annual Medicaid expenditures
     in order to increase the reimbursement rate for structured day program services for
     beneficiaries with traumatic brain injuries. As eligible State Medicaid expenditures for these
     services are reimbursed 50 percent by federal funds, this bill will also increase annual State
     revenue between $2.8 million and $7.6 million, for a net annual State cost between $2.8 million
     and $7.6 million.
                                            BILL DESCRIPTION
   This bill requires the Medicaid per diem or encounter reimbursement rates for Structured Day
Program Services provided by an approved brain injury service provider to a Medicaid beneficiary
requiring treatment for a brain injury to be equal to the average of the reimbursement rates for Tier
D and Tier E Day Habilitation Services provided to an eligible Medicaid beneficiary by the
Division of Developmental Disabilities in the Department of Human Services.
      Office of Legislative Services                                     Legislative Budget and Finance Office
           State House Annex                                                     Phone (609) 847-3105
              P.O. Box 068                                                        Fax (609) 777-2442
      Trenton, New Jersey 08625                                                   www.njleg.state.nj.us
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                                      FISCAL ANALYSIS
EXECUTIVE BRANCH
   None received.
OFFICE OF LEGISLATIVE SERVICES
     The OLS concludes that the department will incur between $5.7 million and $15.2 million in
additional annual Medicaid expenditures in order to increase the reimbursement rate for structured
day program services for beneficiaries with traumatic brain injuries. As eligible State Medicaid
expenditures for these services are reimbursed 50 percent by federal funds, this bill will also
increase annual State revenue between $2.8 million and $7.6 million, for a net annual State cost
between $2.8 million and $7.6 million.
     According to testimony from a member of the New Jersey Advisory Council on Traumatic
Brain Injury before the Senate Health, Human Services and Senior Citizens Committee on June 6,
2024, the current reimbursement rate for structured day program services is approximately $3.65
for every 15 minutes of service. Testimony from the Brain Injury Alliance of New Jersey before
the same committee indicated that roughly 300 Medicaid beneficiaries with traumatic brain
injuries currently receive structured day program services.
     The OLS estimate assumes that this rate of $3.65 per 15 minutes of service would be increased
to the average of FY 2024 Medicaid reimbursement rates for Tier D and Tier E day habilitation
services provided by the Division of Developmental Disabilities, which is $9.72 for every 15
minutes of service according to the division’s public notice from December 2023. The low end of
the OLS estimate represents the annual cost under the bill if the assumed 300 current traumatic
brain injury structured day program clients received five hours of structured day program services
for three days per week. The high end of this estimate represents the annual cost under the bill if
the 300 current clients received eight hours of structured day program services for five days per
week. This range is based upon information regarding typical minimum and maximum service
utilization as reported by structured day program providers for Medicaid beneficiaries with
traumatic brain injuries.
     The OLS notes that these structured day program services are reimbursed under the Medicaid
Managed Long Term Services and Supports program. Under this program, the State pays managed
care organizations a per-beneficiary, per-month capitation rate to cover a broad array of long-term
care services for eligible individuals. Ultimately, any costs incurred by the managed care
organizations due to increased provider reimbursements under this bill will be passed on to the
State in the form of higher capitation rates, as determined by the State’s annual capitation rate
setting process. However, it is possible that other factors in the capitation rate setting process,
which the OLS cannot determine, may affect the actual net State costs incurred under the bill.
  Section:     Human Services
  Analyst:     Sarah Schmidt
               Lead Research Analysist
  Approved:    Thomas Koenig
               Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the Office of Legislative Services due to the
failure of the Executive Branch to respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).
Statutes affected: 
Introduced: 30:4D-7