Bill Summary – FastDemocracy

LEGISLATIVE SERVICES AGENCY
                OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
                                     200 W. Washington St., Suite 301
                                          Indianapolis, IN 46204
                                              (317) 233-0696
                                                 iga.in.gov
                                FISCAL IMPACT STATEMENT
LS 6100                                                            NOTE PREPARED: Nov 10, 2020
BILL NUMBER: SB 46                                                 BILL AMENDED:
SUBJECT: Licensure of Art Therapists.
FIRST AUTHOR: Sen. Grooms                                          BILL STATUS: As Introduced
FIRST SPONSOR:
FUNDS AFFECTED: X GENERAL                                          IMPACT: State & Local
                X DEDICATED
                X FEDERAL
Summary of Legislation: This bill provides that art therapy services provided to an individual who receives
mental health services or to an individual who receives services from a community mental health center are
reimbursable under Medicaid. The bill provides for the licensure of professional art therapists and art
therapist associates by the Behavioral Health and Human Services Licensing Board through the Professional
Licensing Agency. It establishes qualifications and requirements for a licensed art therapist and licensed art
therapist associate.
Effective Date: July 1, 2021.
Explanation of State Expenditures: Summary - To develop the new licenses, the Professional Licensing
Agency (PLA) will incur one-time startup costs equating to an estimated $70,300 in staff salary in FY 2022.
Ongoing administrative workload for PLA is likely to be small, since the new licenses will be issued under
the existing Behavioral Health and Human Services Licensing Board. Additionally, two new Board members
may receive a per diem and travel reimbursement for expenses incurred while attending Board meetings. The
bill will result in an indeterminable increase in state Medicaid expenditures, depending on administrative
actions by the Office of Medicaid Policy and Planning (OMPP) and utilization rates of art therapy services.
Additional Information - License Development and Administration: The following table explains the initial
and ongoing estimated costs for PLA to create and administer the new art therapy licenses.
SB 46                                                 1
                                   Estimated Costs for New Professional License
          Expenditure Type                                Explanation                                 Estimated Cost
        License Development*                 Salary cost to PLA to develop                $70,300 one-time
                                             new license (includes rule
                                             development and IT
                                             expenditures)
 Board Member Meeting and Travel             Expenses of two new members on               $200 per year
          Expenses**                         the Board (assumes FY 2019 costs
                                             increase proportionately to increase
                                             in board size)
  Ongoing Staff and Miscellaneous            License administration and                   $2,000 per year
           Expenditures                      overhead costs
         Total Ongoing Costs                 Board meetings plus                          $2,200 per year
                                             administrative costs
 *One-time start-up expenditure, which equates to the salary cost of existing PLA staff to develop the proposed license. If existing
 PLA staff is insufficient to develop the license, then additional staffing could be met through funded vacancies or hiring of a new
 staff member(s). Hiring of new staff outside the PLA’s allocated budget could be accomplished through reallocation of existing
 funds not currently used for staff or new appropriations made by the General Assembly.
 **FY 2019 Board member reimbursement data is used for this estimate because a high volume of Board meetings in FY 2020 were
 held remotely, decreasing travel reimbursements. To the extent remote meetings continue, travel reimbursements may be lower.
Medicaid Costs: The bill limits Medicaid reimbursement for art therapy services to children receiving mental
health services under the Children’s Health Insurance Program (CHIP) and individuals receiving services
from a community mental health center (as defined in IC 12-29-2). OMPP would likely be required to request
federal approval of a State Plan Amendment (SPA) to allow reimbursement for art therapists. Submitting
SPA requests is considered a routine administrative function of OMPP and can likely be accomplished under
current staffing and resource levels.
If federal approval is granted, OMPP would be required to establish reimbursement rates for art therapy
services, update provider reference modules, and issue a provider bulletin explaining the new services. Total
Medicaid expenditures would depend on reimbursement rates established by OMPP and utilization of art
therapy services by Medicaid and CHIP enrollees. Current OMPP policy allows reimbursement for certain
mental health services rendered by mid-level practitioners licensed by the Behavioral Health and Human
Services Licensing Board. These services must be provided under the medical supervision of a licensed
physician or psychologist. Current OMPP reimbursement rates for psychotherapy services provided by these
mid-level practitioners range from $15 to $95 per session. Reimbursement rates for art therapy may be
expected to fall in this range.
Medicaid and CHIP are jointly funded between the state and federal governments. The standard state share
of costs for most Medicaid medical services for FFY 2021 is 34%, or 10% for the age 19 to 64 expansion
population within the Healthy Indiana Plan. The standard state share of CHIP costs is 24%. Under federal
COVID-19 relief legislation, the state share of costs is decreased to 28% for traditional Medicaid enrollees
and 20% for CHIP enrollees for the duration of the federally declared public health emergency. For services
provided in a community mental health center, the state share of reimbursement would be borne by the
county governments operating the community mental health centers. For the current biennium, community
mental health centers have been appropriated $7.2 M per fiscal year in dedicated funds.
SB 46                                                            2
Explanation of State Revenues: License Fees - The bill would increase General Fund revenue from license
fees collected by the Behavioral Health and Human Services Licensing Board. Currently, all practitioners
licensed by the Board pay initial application fees and biennial renewal fees of $50 each. There are currently
27 art therapy practitioners in the state of Indiana that have credentials issued by the national Art Therapy
Credentials Board. There are another 38 credentialed art therapists in the Chicago, Cincinnati, and Louisville
areas that could potentially seek reciprocal licensure under the bill. The number of art therapists expected
to seek a license under the bill may grow by an indeterminable amount as a result of the state recognition and
Medicaid and CHIP reimbursement provided for by the bill.
Penalty Provision - The bill imposes a Class A misdemeanor for individuals who practice art therapy
unlawfully. If additional court cases occur and fines are collected, revenue to both the Common School Fund
(from fines) and the state General Fund (from court fees) would increase. The maximum fine for a Class A
misdemeanor is $5,000. However, any additional revenue would likely be small.
Explanation of Local Expenditures: Community Mental Health Centers - Counties that operate a
community mental health center that provides art therapy services to Medicaid recipients would be
responsible for the non-federal share (typically 10% or 34%) of reimbursement costs.
Penalty Provision - A Class A misdemeanor is punishable by up to one year in jail.
Explanation of Local Revenues: Penalty Provision - If additional court actions occur and a guilty verdict
is entered, local governments would receive revenue from court fees. However, any change in revenue would
likely be small.
State Agencies Affected: Professional Licensing Agency, Behavioral Health and Human Services Licensing
Board; Family and Social Services Administration, Office of Medicaid Policy and Planning.
Local Agencies Affected: Community mental health centers, trial courts, local law enforcement agencies.
Information Sources: OFMA Professional Licensing Cost Estimator; Legislative Services Agency, Indiana
Handbook of Taxes, Revenues, and Appropriations, FY 2019; Indiana Health Coverage Programs, Mental
Health and Addiction Services Provider Reference Module; Indiana Health Coverage Programs, Fee
Schedules: https://www.in.gov/medicaid/providers/678.htm American Art Therapy Association, Art
Therapist Locator: https://arttherapy.org/art-therapist-locator/.
Fiscal Analyst: Adam White, 317-234-1360.
SB 46                                                 3
Statutes affected: 
1. Introduced Senate Bill (S): 12-15-5-1, 16-18-2-295, 25-0.5-2-22, 25-23.6-1-3.8, 25-23.6-2-2, 25-23.6-2-8, 25-23.6-2-11, 25-23.6-10.1-2