Fiscal Note & Local Impact Statement

124 th General Assembly of Ohio

Revised

Ohio Legislative Service Commission

77 South High Street, 9th Floor, Columbus, OH 43266-0342 ˛ Phone: (614) 466-3615

˛ Internet Web Site: http://www.lsc.state.oh.us/

BILL:

Sub. H.B. 150

DATE:

March 20, 2002

STATUS:

As Enacted – Effective August 1, 2002

SPONSOR:

Rep. Schuring

LOCAL IMPACT STATEMENT REQUIRED:

No —

Introduced version had no local cost; enacted version includes potential local costs for some insurance plans required to cover the cost of hearing screenings

 


CONTENTS:

Require a hearing screening for each newborn born in a hospital

 

State Fiscal Highlights

 

STATE FUND

FY 2003

FY 2004

FUTURE YEARS

General Revenue Fund

     Revenues

- 0 -

- 0 -

- 0 -

     Expenditures

Estimated increase of $75,000 to $675,000 plus potential increase ranging between $100,000 and $250,000

Estimated increase of $75,000 to $675,000 plus potential increase ranging between $100,000 and $250,000

Estimated annual increase of $75,000 to $675,000 plus potential increase ranging between $100,000 and $250,000

Medically Handicapped Children – County Assessments (SSR Fund 666)

     Revenues

- 0 -

- 0 -

- 0 -

     Expenditures

Minimal increase

Minimal increase

Minimal increase

Note:  The state fiscal year is July 1 through June 30.  For example, FY 2003 is July 1, 2002 – June 30, 2003.

 

·        According to the Ohio Department of Job and Family Services (JFS), about 35% – 40% of all births in Ohio are eligible for Medicaid reimbursement.  The Department of Job and Family Services stated that the additional cost associated with a hearing screening defined in the bill in section 3701.503 of the Revised Code should be covered in the existing hearing screening Diagnostic Related Group (DRG) reimbursement rates in the Medicaid program.  For this reason, fiscal impact to the Medicaid program should be minimal.

·        The bill requires the Department of Health (DOH) to reimburse any hospital or freestanding birthing center that provides a hearing screening under the provisions of the bill if the screening occurs prior to the discharge of the newborn and if the parent or guardian of the newborn is financially unable to pay for the hearing screening and there is no third party payer that will reimburse the facility.  The costs of an audiological screening range from $30 - $70 per screening.  Since the cost of the existing paper screening is about $25, the net increase as a result of the bill would be $5 - $45 per screening.

·        According to the Children’s Defense Fund’s 2001 Children in the States, for the period covering 1997-1999, 10% of Ohioans under age 19 did not have health insurance.  If one assumes that this 10% is evenly spread among age cohorts, there would be about 15,000 births per year in which a third party payer did not cover the hearing screening.  However, LSC is unable to precisely determine the portion of newborns that would have no third party coverage of the screening and whose family is financially unable to afford the screening.

·        Legislative Service Commission estimates that the Department of Health would be required to cover the cost of the hearing screening for up to 15,000 births per year.  The total increase in cost would range from $75,000 to $675,000.

·        Other DOH costs under the bill involve the preparation and distribution of materials to hospitals, freestanding birthing centers, and each local board of health on the importance of hearing screening and evaluation.  Under current law, the Department is required to provide information to hospitals and freestanding birthing centers describing factors or conditions of hearing loss.  Since the Department would only need to modify its existing publications, the added costs would be minimal.  These costs would be borne in the Department’s Medically Handicapped Children program, which is funded with both GRF and State Special Revenue Fund 666.

·        Other potential DOH costs include a provision allowing the Department to make mass purchases of hearing screening equipment or establishing a grant program, if funds are available.

·        The bill requires rules to be adopted no later than six months after the effective date of the bill and states that hospitals and freestanding birthing centers must follow the provisions of the bill covering hearing screenings, with certain exemptions, no later than June 30, 2004.  Therefore, the fiscal effect of this bill will not begin until fiscal year 2003 at the earliest and potentially not until fiscal year 2004.

·        Under the rules to be adopted, hospitals and freestanding birthing centers will be required to submit hearing screening information to the Department of Health.  In addition, the Department will be required to conduct timely reviews of these submissions.

·        The state may experience an increase in the cost of providing health benefits to workers with family coverage through the Ohio Med plan.  This benefit may already be covered by the plan, but LSC has not had time to confirm that with DAS.  The costs of the bill could increase GRF expenditures by up to approximately $250,000 per fiscal year.  This potential cost increase could be recovered from state employees in whole or in part through higher employee share payments or through smaller wage increases.

Local Fiscal Highlights

 

LOCAL GOVERNMENT

FY 2002

FY 2003

FUTURE YEARS

Boards of Health

     Revenues

- 0 -

- 0 -

- 0 -

     Expenditures

- 0 -

Minimal increase

Minimal increase

Counties, Municipalities, Townships, and School Districts

     Revenues

- 0 -

- 0 -

- 0 -

     Expenditures

- 0 -

Potential increase ranging from $350,000 to $800,000

Potential increase ranging from $350,000 to $800,000

Note:  For most local governments, the fiscal year is the calendar year.  The school district fiscal year is July 1 through June 30.

·        Under the bill, local boards of health are required to provide the information produced by the Department of Health regarding the importance of hearing screenings to the parents of children born in the area served by the board of health who were not born in a hospital or freestanding birthing center.  For the years 1995 through 1999, the average number of annual births occurring outside of a hospital or freestanding birthing center was 1,231, or 0.81% of total average annual births for this period.  Therefore, local boards of health should incur a minimal increase in expenditures to comply with this provision.

·        The bill could lead to an increase in rates charged by health insuring corporations and by sickness and accident insurers as a result of the provision requiring hearing screening to be a covered service.  Any potential increase in HIC rates could be recovered from local government employees in whole or in part through higher employee share payments or through smaller wage increases.  This could potentially increase local costs between $350,000 and $800,000.

 


 

Detailed Fiscal Analysis

 

The bill requires a hearing screening for all newborns born in a hospital or freestanding birthing center.  According to the Ohio Department of Health (DOH) Data Warehouse, in 1999 there were 151,596 births in Ohio.  For the past few years, the number of hospital births in Ohio has been around 150,000.  The following table lists the number of births in Ohio from 1990 through 1998.

 

 

Location of Birth

 

 

Hospital

Home

Non-Hospital Clinic

Other

Total

Year

#

%

#

%

#

%

#

%

#

1999

148,838

98.2

625

0.4

649

0.4

1,484

1.0

151,596

1998

150,843

98.9

963

0.6

641

0.4

10

0.0

152,457

1997

149,847

99.0

956

0.6

567

0.4

19

0.0

151,389

1996

149,917

98.9

996

0.7

605

0.4

27

0.0

151,545

1995

152,131

98.9

1,034

0.7

542

0.4

40

0.0

153,747

1994

154,192

99.0

955

0.6

546

0.4

41

0.0

155,734

1993

157,321

99.1

909

0.6

510

0.3

33

0.0

158,773

1992

160,530

99.1

902

0.6

526

0.3

32

0.0

161,990

1991

164,087

99.2

862

0.5

402

0.2

38

0.0

165,389

1990

165,423

99.2

869

0.5

373

0.2

21

0.0

166,686

Source:  Ohio Department of Health Data Warehouse

 

For the period covering 1995 through 1999, the average annual number of births that occurred in Ohio was 152,147.  Of this total, 150,916 occurred in a hospital or non-hospital clinic (99.19%) and 1,231 occurred at home or a location other than a hospital or non-hospital clinic (0.81%).

 

Impact on Medicaid

 

According to the Ohio Department of Job and Family Services (JFS), the impact of this bill on the Medicaid program should be minimal.  Current law in Ohio requires each hospital to screen for hearing impairments through the use of a high-risk questionnaire.  According to JFS, this paper test costs approximately $25 per screening.

 

Under the bill, a hearing screening involves the use of automated or diagnostic auditory brainstem response, otoacoustic emissions, or an equivalent physiologic technology.  The Department of Job and Family Services stated that these tests cost between $35 and $70 per screening.  According to JFS, the existing Medicaid reimbursement rates for the hearing screening Diagnostic Related Group (DRG) are adequate to cover the additional costs associated with the technological screenings required in the bill.

 

Approximately 35% – 40% of all births in Ohio are eligible for Medicaid reimbursement.  This covers about 60,000 births per year.  Additionally, hospitals providing hearing screening that are not reimbursed via a third party payer can bill through the hospital care assurance program (HCAP) for coverage.

 

Impact on Department of Health

 

The bill requires the Department of Health to reimburse any hospital or freestanding birthing center that provides a hearing screening to a newborn if the parents or guardians of the newborn are financially unable to pay for the hearing screening and if no third party payer reimburses the facility for the hearing screening.

 

According to information obtained from the Children’s Defense Fund’s 2001 Children in the States, 10% of Ohioans under the age of 19 in the period covering 1997-1999 have no health insurance.  If one assumes that this 10% is spread evenly among age cohorts, there would be about 15,000 births per year in which a third party payer did not cover the hearing screening.  However, LSC is unable to precisely determine the portion of newborns that would have no third party coverage of the screening and whose family is financially unable to afford the screening.

 

Under current law, newborn hearing screenings consist of a paper questionnaire.  The paper test costs about $25 per newborn.  The hearing screenings required under this bill are estimated to cost between $30 and $70 per screening.  This means that the estimated net increase to the Department of Health is between $5 and $45 per screening.  If all 15,000 uninsured children also come from families who are unable to afford the screening, the added cost to DOH would be between $75,000 and $675,000.  This figure was obtained by multiplying $5 and $45 by 15,000 (estimated number of uninsured children).  However, as noted above, LSC is unable to quantify the specific number of screenings that would be reimbursed by DOH for uninsured children.

 

The bill also requires the Department to prepare and distribute materials to hospitals, freestanding birthing centers, and local boards of health on the importance of hearing screening and evaluation.  Under current law, the Department is required to provide information to hospitals and freestanding birthing center describing factors or conditions of hearing loss.  Since the Department would only need to modify its existing publications, the added costs would be minimal.  These costs would be borne in the Department’s Medically Handicapped Children program, which is funded with both GRF and State Special Revenue Fund 666.

 

Other potential DOH costs include a provision allowing the Department to make mass purchases of hearing screening equipment or establishing a grant program, if funds are available.

 

The bill requires rules to be adopted no later than six months after the effective date of the bill and states that hospitals and freestanding birthing centers must follow the provisions of the bill covering hearing screenings no later than June 30, 2004, with certain exceptions.  In these situations, the Department may grant a one-year extension for the hospital or freestanding birthing center to comply with the provisions of this bill.  Therefore, the fiscal effect of this bill will not begin until fiscal year 2003 at the earliest and potentially not until fiscal year 2004.  When including the 90-day delay in the effective date of the bill, six months after the effective date of the bill would mean that rules would not need to take effect until FY 2003.  Therefore, all facilities would not be required to give the hearing screening required in the bill until FY 2004 at the latest.  This does not mean, however, that no facility will provide the screenings during FY 2003.  But, LSC is unable to determine what percent of facilities would provide the screenings beginning in FY 2003 and what percent would begin in FY 2004.

In addition, hospitals and freestanding birthing centers will be required to submit hearing screening information to the Department of Health.  In addition, the Department will be required to conduct timely reviews of these submissions.

 

Impact on Local Boards of Health

 

Under the bill, local boards of health are required to provide the information produced by the Department of Health regarding the importance of hearing screenings to the parents of children born in the area served by the board of health who were not born in a hospital or freestanding birthing center.  For the years 1995 through 1999, the average number of annual births occurring outside of a hospital or freestanding birthing center was 1,231, or 0.81% of total average annual births for this period.  Therefore, local boards of health should incur a minimal increase in expenditures to comply with this provision.

 

Impact on Health Insurance

 

Continuing law requires sickness and accident insurance policies and employee benefit plans that provide coverage for family members and benefits for children to include benefits for child health supervision services for children from birth to age nine.  The benefits for child health supervision services that are provided to a child from birth to age one are not required to exceed a maximum of $500.  The act provides that child health supervision services include hearing screenings under the Department of Health's hearing screening program.  The coverage for hearing screenings must not exceed $75 of the $500 maximum coverage limit.

The state, local governments, and school districts may experience an increase in the cost of providing health benefits to workers with family coverage through the Ohio Med plan.  This benefit may already be covered by the plan, but LSC has not had time to confirm that with DAS.  The costs of the bill could increase GRF expenditures by up to approximately $250,000 per fiscal year.  To find the possible increase in HIC costs, the total number of children screened (150,916) is multiplied by the cost per test (range between $30 and $70 per test).  The Legislative Service Commission is estimating that 11.2% will be covered by a government employer health insurance plan.  The potential increase was determined by taking the percentage of government employer health plans that are covering both state employees and local employees (excluded federal employees).  According to June 2001 Bureau of Labor Statistics data, of the 783,800 public employees in Ohio, 21.0% are state workers and 68.4% are local government employees.

 

 

Total No.
of Newborns

Total Cost
Statewide

Cost for
Public Employees
(11.2 % of total cost)

Cost to
Employer

State Employees (@$30 per screening)

150,916

$4,527,480

$507,078

$106,486

Local Employees (@$30 per screening)

150,916

$4,527,480

$507,078

$346,841

State Employees (@$70 per screening)

150,916

$10,564,120

$1,183,181

$248,468

Local Employees (@$70 per screening)

150,916

$10,564,120

$1,183,181

$809,296

 

Any potential increase in HIC rates could be recovered from government employees in whole or in part through higher employee share payments or through smaller wage increases.  This could potentially increase local costs between $350,000 and $800,000.

 

 

 

 

LSC fiscal staff:   Chris Murray, Economist

                             Jeffrey M. Rosa, Senior Budget Analyst

                             Ross Miller, Economist

 

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