Preview of FY20 Appropriation Request Brent Earnest, Secretary October 24,2018

Appropriation Request HSD Fiscal Year 2020 Appropriation Request FY 20 Budget Request of $7.143 billion 3.85% increase overall $1.128 billion from the general fund (increase of $74.7 million or 7.09%) $5.729 billion in federal funds (increase of $166.9 million or 3.00%) $285.5 million in other state funds and other revenue

HSD General Fund Budget Change *GF adjustment due to ARRA

Medicaid Budget Update For FY18, the Legislature appropriated $915.6 million. We are projecting to spend $ 907.8 million, resulting in a general fund surplus of $7.8 million in FY 18. The FY19 general fund need for Medicaid is projected to be $944.6 million. The Legislature appropriated $933.6 million, resulting in a projected shortfall of $11.0 million in FY 19. ($ in millions) FY14 Actual FY15 Actual FY16 Projection FY17 Projection* FY18 Projection* FY19 Total Budget $4,200.6 $5,162.3 $5,413.9 $5,607.1 $5,680.0 $5,709.8 General Fund Need $901.9 $894.1 $912.9 $909.5 $907.8 $944.6 *Projection data as of June 2018. The projections include all push forward amounts between SFYs. These figures exclude Medicaid administration.

*children 19-21 y.o. counted in OAG New Mexico Medicaid Enrollment and PMPM June 2019 Projected Enrollment Total=865,280 (+2.1% from June 2018) Expansion/OAG: 260,024 Medicaid Adults: 251,005 Medicaid Children: 354,330* *children 19-21 y.o. counted in OAG Projected June 2018: 847,794 5

Enrollment Impacts New Mexico’s Improving economy Source: Bureau of Labor Statistics (2018 Data is Preliminary)

Enrollment Impacts National Trend of Slowing enrollment

Enrollment Impacts New Mexico’s Uninsured Rate 2016 New Mexico – 8.9% U.S. – 8.5%

Enrollment Impacts: New Mexico 19-64 Uninsured and Medicaid-Insured by FPL 2016: 138% FPL, $16,394 (single), $33,534 (4-person) This is an optional chart if you want the level and percentage charts combined. Source: SHADAC State Health Compare, University of Minnesota

Federal Outlook (FY20 Budget Issues) Expansion FMAP steps down again on January 1, 2019, to 93% and on January 1, 2020 to 90%. Regular FMAP rates improved slightly for NM CHIP Reauthorization 100% expires in September 30, 2019. Phase-out increased to states’ E-FMAP by 11.5% through September 30, 2020. E-FMAP reverts back on October 1, 2020. Re-imposition of the Federal Health Insurance Provider Fee FFY 2018 FFY 2019 FFY 2020 72.16% 72.26% 72.71%

Medicaid: FY 20 Appropriation Request (as of Sept. 1) Total Medicaid Program spending in FY 20 is projected to be $5.892 billion. $1,004.7 million from the general fund, a $71.1 million increase. Major changes from FY19 include: ($ in millions) FY20 base - additional general fund above FY19 appropriation $9.23 Expansion FMAP (drops to 93% in 2019 and 90% in 2020) $33.0 CHIP FMAP Reduction (100% to 92.37%) $6.87 FMAP Change (71.9% to 72.13%) ($12.12) Centennial Care Enrollment and utilization $34.45 Centennial Care 2.0 Initiatives $6.99 Medicare Part A, B & D $8.13 Fee for Service lines, HIT, UR Contracts $.74 Other Revenue changes – Drug Rebates, County Supported , Other ($16.14) Total $71.1

Medicaid: Administration The total FY 20 budget request for administration of the Medicaid program is $88.4 million $3.836 million increase from FY19 $492.2 thousand increase in general fund need 1.49% of the total program budget. Priorities for MAD staff in 2019 include: Implementation of 1115 Waiver Renewal Continued procurement and implementation of replacement MMIS Implementation of JUST health program with correctional facilities ($400 thousand from 2018 HB2 appropriation)

Behavioral Health Services Division Total budget request of $60.3 million $37.8 million request from the general fund ($763.7 thousand increase from FY19) $238 thousand to fill vacant positions for utilization management, program and financial audit functions $300 thousand for evidence based substance use disorder treatment $100 thousand for housing for the homeless due to behavioral health disabilities $100 thousand for JUST Health program $22.5 million in federal grants

BH Utilization Trend

Behavioral Health Spending Total HSD Behavioral Health Spending (excl. administration)-   FY18 Actuals FY19 Op Bud FY20 Request ($ in millions) GF FF Total Medicaid Behavioral Health $97.93 $390.11 $488.04 $101.21 $401.07 $502.28 $110.15 $421.07 $531.22 Behavioral Health Services Division $34.72 $24.63 $59.35 $34.38 $22.24 $56.61 $34.44 $22.60 $57.04 $132.65 $414.73 $547.39 $135.59 $423.31 $558.88 $144.60 $443.67 $588.26 Percent change from prior year -8.4% -0.015% -2.2% 2.21% 2.07% 2.10% 6.64% 4.81% 5.25%

Child Support Enforcement Division $31.25 million total budget Request – Request is flat from FY19 $7.74 million from the general fund $20.5 million from federal funding $3 million from other revenue 71,965 child support cases in FY18 78.5% of cases have obligated support order  

Income Support Division $957.1 million overall budget $2.1 million increase from the general fund : $502 thousand to maintain Senior SNAP Supplement; projected caseload of 18,400 $1.2 million for eligibility system and processing services (mailing, call center services, training, income verification services) $375 thousand increase for food banks SNAP Caseload Slight growth projected, from 224,027 thousand cases to 225,282. $660 million of SNAP benefits

Temporary Assistance for Needy Families – (TANF) FY20 TANF appropriation request of $139.5 million: TANF block grant of $109.9 million and $29.5 million of current carry over balances.  Cash assistance, flat with FY19 OpBud. Includes restoring (increasing) monthly cash assistance grant by 7.5%  Maintains support of programs at other agencies Continues support services programs, such as attaining high school equivalency and employment programs.

Temporary Assistance for Needy Families – (TANF) Admin Includes: Income Support Administration and Program Support Administration Cash Assistance Includes: Cash Assistance, Clothing Allowance, Diversion Payments, Wage Subsidy and State Funded Legal Aliens Support Services Include: NM Works Program, Transportation, Career Links, High School Equivalency program, Vocational Training Program and Employment Related Costs Other Agencies Include: CYFD Pre K, CYFD Child Care, CYFD Home Visiting, CYFD Supportive Housing and PED Pre K

Program Support and Information Technology Program Support provides administrative support to the program divisions of HSD The FY20 budget request for Program Support is $55.6 million, with $16.1 million requested from the General Fund Key projects and results ASD: Unqualified opinion from independent auditors in FY16 and FY17; FY18 in progress and on track ITD: Maintain and support critical and large-scale, statewide IT systems ITD: MMIS and CSIS replacement projects in progress

Medicaid Management Information System Replacement (MMISR) Part of the HHS2020 initiative Creates a client-centric business solution and is the foundation for additional development within New Mexico’s Health & Human Services (HHS) enterprise. Undertaking multiple procurements to implement MMISR System Integrator (SI) – contract awarded Data Services (DS) – contract in review and signature process Quality Assurance (QA) -- in contract negotiation Benefit Management Services (BMS) -- release RFP in November 2018 Financial Services (FS) -- release RFP in December 2018 Unified Public Interface (UPI) Consolidated Customer Services Center – November 2018 Unified Portal -- TBD

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