Bill Summary – FastDemocracy

State of Alaska
                                                         Fiscal Note
                                                                                          Bill Version:                    CSHB 25(FIN)
 2018 Legislative Session
                                                                                          Fiscal Note Number:              7
                                                                                          (H) Publish Date:                3/29/2018
 Identifier:        HB025CS(FIN)-DHSS-HCMS-1-4-18                           Department:       Department of Health and Social Services
 Title:             INSURANCE COVERAGE FOR                                  Appropriation: Medicaid Services
                    CONTRACEPTIVES                                          Allocation:       Health Care Medicaid Services
 Sponsor:           CLAMAN                                                  OMB Component Number:              2077
 Requester: House Rules
 Expenditures/Revenues
 Note: Amounts do not include inflation unless otherwise noted below.                                                            (Thousands of Dollars)
                                                 Included in
                                    FY2019       Governor's
                                Appropriation      FY2019                                        Out-Year Cost Estimates
                                  Requested       Request
 OPERATING EXPENDITURES               FY 2019        FY 2019        FY 2020                 FY 2021           FY 2022            FY 2023        FY 2024
 Personal Services
 Travel
 Services
 Commodities
 Capital Outlay
 Grants & Benefits                      (677.9)                    (1,355.7)               (1,355.7)          (1,355.7)         (1,355.7)       (1,355.7)
 Miscellaneous
 Total Operating                        (677.9)           0.0      (1,355.7)               (1,355.7)          (1,355.7)         (1,355.7)       (1,355.7)
 Fund Source (Operating Only)
 1002 Fed Rcpts (Fed)                       (430.0)                         (855.0)          (850.0)            (845.0)           (842.5)         (842.5)
 1003 G/F Match (UGF)                       (247.9)                         (500.7)          (505.7)            (510.7)           (513.2)         (513.2)
 Total                                      (677.9)            0.0        (1,355.7)        (1,355.7)          (1,355.7)         (1,355.7)       (1,355.7)
 Positions
 Full-time
 Part-time
 Temporary
 Change in Revenues
 None
 Total                                          0.0            0.0                 0.0            0.0                0.0              0.0             0.0
 Estimated SUPPLEMENTAL (FY2018) cost:            0.0                 (separate supplemental appropriation required)
 (discuss reasons and fund source(s) in analysis section)
 Estimated CAPITAL (FY2019) cost:                 0.0                 (separate capital appropriation required)
 (discuss reasons and fund source(s) in analysis section)
 ASSOCIATED REGULATIONS
 Does the bill direct, or will the bill result in, regulation changes adopted by your agency?             yes
 If yes, by what date are the regulations to be adopted, amended or repealed?                             01/01/19
 Why this fiscal note differs from previous version/comments:
 Not applicable; initial version.
 Prepared By:             Margaret Brodie, Director                                                             Phone:         (907)334-2400
 Division:                Health Care Services                                                                  Date:          01/03/2018
 Approved By:             Shawnda O'Brien, Assistant Commissioner                                               Date:          01/04/18
 Agency:                  Health and Social Services
Printed 3/28/2018                                                    Page 1 of 3                                                        Control Code: mrCww
                                                                                                         CSHB 25(FIN) - Fiscal Note 7
                                                 FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                 BILL NO. CSHB025(FIN)
2018 LEGISLATIVE SESSION
Analysis
   Benefits Costs
   Oral Contraceptives: Duplication of Services
   It is anticipated that there will be approximately 7,940 female Medicaid recipient oral contraceptive users annually (of
   which, 2,940 are through expansion). It is anticipated that approximately 10% or 794 members who are oral contraceptive
   users may require duplication of services (e.g., therapy changes, replacement of lost or stolen contraceptives, and
   diverted contraceptives). Based on an average 4-month duplication of services, and based on a $45 per month National
   Average Drug Acquisition Cost average for oral contraceptives, the total duplication of services cost is estimated to be
   (794 members X 4 months X $45) = $142.9 (of which, $52.9 is attributable to expansion)
   Benefits Savings
   Of the approximately 8,000 female Medicaid members who are contraceptive users, we assume that 75% or 6,000 plan to
   use the oral contraceptive long-term (i.e., longer than 12 months). With a standard oral contraceptive failure rate of 9% as
   cited by the Centers for Disease Control, 540 unintended pregnancies would result. A report by Foster et. al. (2011)
   projects a decrease in failure rate of approximately 30% when oral contraceptives are dispensed in 12-month quantities,
   which would result in an oral contraceptive failure rate of 6%. However, based on variable factors in Alaska, we have
   estimated a failure rate of 7%. This 7% failure rate would approximate 420 unintended pregnancies. Therefore, it is
   approximated that the difference between a 9% failure rate and a 7% failure rate, or 120 unintended pregnancies, may
   potentially be avoided through dispensing 12-month quantities of contraceptives.
   Based on Medicaid claims data, the rate of complicated births is approximately 4.4%. Applying this differential, we
   estimate that approximately 5.28 of the avoided 120 unintended pregnancies would have been complicated births, and
   the remaining 114.72 would have been non-complicated. The cost factor used for a complicated birth was $110.0; the
   cost factor used for a non-complicated birth was $8.0. Therefore, benefits savings is estimated at (5.28 X $110.0) +
   (114.72 X $8.0) = $1,498.6 (of which, $562.0 is attributable to expansion).
   $142.9 + ($1,498.6) = ($1,355.7) net total annual projected savings in this component.
   FUND SOURCE:
   The Medicaid FMAP for contraceptives is 90%
   The Medicaid FMAP for pregnancy-related services is 50%
   FMAP for the Medicaid expansion population changes by federal fiscal year for several years, settling at 90% for all
   services by calendar year 2023. Prorated by state fiscal year, the expansion FMAP rates are:
   FY2019 - 93.5%
   FY2020 - 92.5%
   FY2021 - 91.5%
   FY2022 - 90.5%
   FY2023 - 90.0%
   FY2024 - 90.0%
(Revised 9/26/17 OMB/LFD)                                                                                         Page 2 of 3
HB025CS(FIN)-DHSS-HCMS-1-4-18                                  Page 2 of 3                                                Control Code: mrCww
                                                                                                           CSHB 25(FIN) - Fiscal Note 7
                                                 FISCAL NOTE ANALYSIS
STATE OF ALASKA                                                                  BILL NO. CSHB025(FIN)
2018 LEGISLATIVE SESSION
Analysis
   Applying these several FMAP rates generates the following FY2019 fund source splits:
   Promulgation of associated regulations will take approximately six months following State Plan Amendment approval by
   the Centers for Medicare and Medicaid Services, with implementation effective January 1, 2019.
   Since the regulations will only be in effect for six months of FY2019, cost savings have been adjusted to reflect one-half of
   the fiscal year. The department anticipates a net FY2019 savings of ($430.0) federal ($860.0 x.5 = $430.0) and ($247.9) GF
   match ($495.7 x .5 = $247.9).
   The logic of the calculations for FY2020 - 2024 is the same as above for FY2019.
(Revised 9/26/17 OMB/LFD)                                                                                           Page 3 of 3
HB025CS(FIN)-DHSS-HCMS-1-4-18                                   Page 3 of 3                                              Control Code: mrCww
Statutes affected: 
HB0025A, AM HB 25, introduced 01/18/2017: 47.07.065
HB0025B, AM CSHB 25(HSS), introduced 04/12/2017: 39.30.090, 14.25.168, 14.25.480, 22.25.090, 39.35.535, 39.35.880, 39.37.145, 23.15.136, 39.30.091, 21.86.310, 14.25.110, 23.15.010, 23.15.210, 21.42.427, 47.07.065
HB0025C, AM CSHB 25(FIN), introduced 05/15/2017: 29.10.200, 29.20.420, 21.42.427, 21.54.500, 39.30.090, 14.25.168, 14.25.480, 22.25.090, 39.35.535, 39.35.880, 39.37.145, 23.15.136, 39.30.091, 21.86.310, 14.25.110, 23.15.010, 23.15.210, 47.07.065
HB0025D, AM CSHB 25(FIN) am(efd fld), introduced 04/06/2018, passed House 04/09/2018: 29.10.200, 29.20.420, 21.42.427, 21.54.500, 39.30.090, 14.25.168, 14.25.480, 22.25.090, 39.35.535, 39.35.880, 39.37.145, 23.15.136, 39.30.091, 21.86.310, 14.25.110, 23.15.010, 23.15.210, 47.07.065