Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 larry.campbell@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Larry L. Campbell, Director Laura Kelly, Governor


January 31, 2019


The Honorable Gene Suellentrop, Chairperson
Senate Committee on Public Health and Welfare
Statehouse, Room 441-E
Topeka, Kansas 66612
Dear Senator Suellentrop:
SUBJECT: Fiscal Note for SB 10 by Robert G. (Bob) Bethell Joint Committee on Home
and Community Based Services and KanCare Oversight
In accordance with KSA 75-3715a, the following fiscal note concerning SB 10 is
respectfully submitted to your committee.
SB 10 would eliminate the client obligation for all individuals receiving home and
community-based services under the Kansas medical assistance program. Under current law,
individuals receiving home and community-based services pay a client obligation based on the
individual’s monthly income.

Estimated State Fiscal Effect
FY 2019 FY 2019 FY 2020 FY 2020
SGF All Funds SGF All Funds
Revenue -- -- -- --
Expenditure -- -- $11,600,000 $27,000,000
FTE Pos. -- -- -- --
The Kansas Department of Health and Environment (KDHE) estimates enactment of SB
10 would increase expenditures by $27.0 million from all funding sources, including $11.6 million
from the State General Fund in FY 2020 and future fiscal years. The bill would require KDHE to
set monthly income standards by individual, at an amount that would eliminate that individual’s
client obligation.
The Honorable Gene Suellentrop, Chairperson
Page 2—SB 10

KDHE indicates that an individual’s client obligation is determined by considering the
individual’s monthly income in conjunction with the protected income limit. Current law places
the effective protected income limit at $747 a month. According to the agency, any income above
$747 would be counted towards an individual’s client obligation, which is the amount of money
individuals are required to pay for home and community-based services per month. Any difference
between the individual’s client obligation and the actual cost of services is paid for by the managed
care organization. SB 10 would require KDHE to set a specific protected income limit for
everyone receiving services in order to eliminate any client obligation payment.
Client obligation payments are cost avoidances for the state, as client obligation payments
are counted as a reduction in the monthly capitation payments made to managed care
organizations. Over the past three years, statewide individual client obligation payments have
totaled between $2.0 million to $2.4 million per month, or roughly $27.0 million per year.
Eliminating client obligations places payment responsibility on the state, totaling $27.0 million,
including $11.6 million from the State General Fund. KDHE indicates enactment of SB 10 could
have a longer-term fiscal effect by eliminating client obligations. The agency estimates there are
individuals in the state that are eligible for home and community-based services who choose to
forgo services because those individuals would be financially responsible for services. As
individuals become aware of the client obligation requirement being eliminated, those individuals
will begin receiving services that would be the responsibility of the state to pay. Expenditures
related to the enactment of SB 10 would be experienced in the budget of the Kansas Department
for Aging and Disability Services.
KDHE also estimates enactment of SB 10 would require approximately 1,750 hours of
work at a cost of $200,000 to make necessary system changes to allow the agency to create
individual monthly income standards for each person receiving services. Any fiscal effect
associated with SB 10 is not reflected in The FY 2020 Governor’s Budget Report.


Sincerely,

Larry L. Campbell
Director of the Budget


cc: Dan Thimmesch, Health & Environment
Cody Gwaltney, Aging & Disability Services