LEGISLATIVE FISCAL ESTIMATE
[Second Reprint]
SENATE, No. 3495
STATE OF NEW JERSEY
220th LEGISLATURE
DATED: DECEMBER 22, 2023
SUMMARY
Synopsis: Provides for presumptive eligibility for home and community-based
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 Sate revenue loss.
Agencies Affected: Department of Human Services
Office of Legislative Services Estimate
Fiscal Impact Annual
Net State Cost Savings $17.2 million to $62.7 million
Net State Revenue Loss $8.6 million to $31.3 million
 The Office of Legislative Services (OLS) determines that requiring presumptive eligibility
under Medicaid for home and community-based services (HCBS) 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 between $17.2 million to $62.7 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 HCBS or PACE services
provided to applicants during the presumptive eligibility period.
 Because State Medicaid expenditures are expected to decrease under the bill, State revenues
are also expected to be lower from reduced federal reimbursements. The net State revenue
loss is estimated at $8.6 million to $31.3 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
The bill requires the Department of Human Services to provide for the presumptive eligibility
for HCBS and PACE services 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.
FY 2024 AVERAGE COST
FY2024 AVERAGE PER CLIENT PER
Service MONTHLY CLIENTS MONTH
Nursing Home Services 25,231 $6,827.73
Program of All-inclusive
Care for the Elderly (PACE) 1,304 $5,075.43
Community-Based Long
Term Care Services (HCBS) 45,584 $3,093.48
OFFICE OF LEGISLATIVE SERVICES
The OLS determines that requiring presumptive eligibility under Medicaid for HCBS and
PACE services will reduce annual State Medicaid expenditures and result in annual net State cost
savings of between $17.2 million to $62.7 million. Because State Medicaid expenditures are
expected to decrease under the bill, State revenues are also expected to be lower by $8.6 million
to $31.3 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 in the three month window immediately
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
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of services with a delay in 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 access 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 offset 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 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 $17.2 million to $62.7 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 $8.6 million to $31.3 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
individual’s 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.).