LEGISLATIVE FISCAL ESTIMATE
[Third Reprint]
ASSEMBLY, No. 4049
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: JULY 6, 2023
SUMMARY
Synopsis: Provides for presumptive eligibility for home and community-based
services, nursing home services, and services provided through
program of all-inclusive care for the elderly under Medicaid.
Type of Impact: Annual net State cost savings and annual net State revenue losses.
Agencies Affected: Department of Human Services.
Office of Legislative Services Estimate
Fiscal Impact Annual
Net State Cost Savings $24 million to $99.5 million
Net State Revenue Loss $12 million to $49.8 million
 The Office of Legislative Services (OLS) determines that requiring presumptive eligibility
under Medicaid for home and community-based services (HCBS), nursing home services, and
programs of all-inclusive care for the elderly (PACE) will reduce annual State Medicaid
expenditures and result in annual net State cost savings of $24 million to $99.5 million.
 Providing for presumptive eligibility under Medicaid for these services would result in State
cost savings by allowing for an applicant’s care needs to be met outside of a nursing home
setting and, instead, via less expensive community-based care. The magnitude of cost savings,
however, will be reduced somewhat due to increased costs for services provided to applicants
during the presumptive eligibility period.
 Because State Medicaid expenditures are expected to be lower under the bill, State revenues
are also expected to be lower from reduced federal reimbursements. The net State revenue
loss is estimated at $12 million to $49.8 million annually.
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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BILL DESCRIPTION
This bill requires the Department of Human Services to provide for the presumptive eligibility
for HCBS, nursing home services, and PACE under Medicaid. An individual seeking presumptive
eligibility under this bill will be required to submit a request in a manner determined by the
department. The department will provide each individual granted presumptive eligibility a written
notice explaining the terms and conditions of presumptive eligibility and the services that the
individual will be eligible to receive. Coverage will begin upon the receipt of an individual’s
request for services and will end if the individual is determined clinically or financially ineligible
for such services during the eligibility determination process.
A provider will be reimbursed for all Medicaid-eligible services rendered to an individual who
has been granted presumptive eligibility under the bill, regardless of whether the individual granted
presumptive eligibility is determined to be clinically or financially ineligible during the eligibility
determination process.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received; however, the following data was provided in the FY 2024 Governor’s Budget.
These data were utilized to establish the estimate discussed below.
SERVICE FY 2024 AVERAGE FY 2024 AVERAGE COST
MONTHLY CLIENTS PER CLIENT PER MONTH
Nursing Home Services 25,231 $6,827.73
Program of All-inclusive Care 1,304 $5,075.43
for the Elderly (PACE)
Community-Based Long Term 45,584 $3,093.48
Care Services (HCBS)
OFFICE OF LEGISLATIVE SERVICES
The OLS determines that requiring presumptive eligibility under Medicaid for HCBS, nursing
home services, and PACE will reduce annual State Medicaid expenditures and result in annual net
State cost savings of $24 million to $99.5 million. Because State Medicaid expenditures are
expected to be lower under the bill, State revenues are also expected to be lower by $12 million to
$49.8 million annually from reduced federal reimbursements. Generally, presumptive eligibility
provides individuals access to Medicaid services without having to wait for their application to be
fully processed.
Cost savings occur under presumptive eligibility when an applicant’s care needs can be met
outside of a nursing home setting, which is typically more expensive than community-based care.
Using retroactive eligibility, Medicaid applicants currently have more immediate access to nursing
home services when the need for long-term care arises. Retroactive eligibility allows Medicaid
providers to submit claims for eligible services provided three months prior to the beneficiary’s
eligibility determination. Generally, under retroactivity eligibility, a nursing home facility can
decide to assume the financial responsibility of providing three months of services with a delay in
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payment, and admit a resident with a pending Medicaid eligibility determination. Many HCBS
and PACE providers, however, lack this financial flexibility.
Under this bill, Medicaid applicants will be able to use presumptive eligibility to equally access
nursing home services, HCBS, and PACE from the time of initial need. Assuming that five to 15
percent of enrollees, who absent the bill would receive nursing home services, instead would
receive home and community-based services under the bill, results in a $56.5 million to $169.6
million annual cost savings to the State. These savings would be reduced somewhat, however,
from the increase in costs for services provided to applicants during the presumptive eligibility
period. Based on studies and certain OLS assumptions regarding increased utilization of nursing
home services, HCBS, and PACE by providing presumptive eligibility for applicants, the OLS
estimates the total annual net cost savings to the State under the bill to be $24 million to $99.5
million. If a more dramatic shift occurs and more applicants pursue home and community-based
services, instead of more costly nursing homes, State cost savings would be higher. The OLS
notes that lower State Medicaid spending would also reduce revenues from federal
reimbursements. The OLS estimates the annual net State revenue loss under this bill to be in the
range of $12 million to $49.8 million.
The assumption of cost savings under presumptive eligibility is supported by multiple studies
that determined that offering immediate access to home and community-based services, without
waiting for the lengthy Medicaid eligibility determination process to be complete, is cost effective
for states. For example, Colorado offered a “Fast Track” Medicaid financial eligibility program
for HCBS to pilot program participants who were discharged from the hospital. The pilot program
enrolled a total of 115 participants, at a total cost of $106,879; by contrast, cost savings under the
pilot program were estimated at $407,012. Another study determined that a similar Washington
state program saved Medicaid an average of $1,964 per beneficiary each month by helping
individuals access community services instead of institutional care.
The OLS notes several variables that may affect the cost of services under this bill, such as:
the administrative costs associated with implementing the program; the unpredictability of how
many applicants will submit requests for presumptive eligibility under the applicable programs, as
well as the length of the presumptive eligibility period; provider capacity to deliver services to
these applicants; and unknown components of the presumptive eligibility program that will be
determined following enactment, such as the type of providers or staff who will be authorized to
determine presumptive eligibility and the funding sources for service costs incurred for an
individual who is determined ineligible for Medicaid.
Section: Human Services
Analyst: Anne Cappabianca
Senior Fiscal Analyst
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.).