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MR Update #05-14: FY 2005/06 State Budget, Medical Assistance Restoration, and Bulletin on Third Party Insurance
July 8, 2005

State Fiscal Surplus
Pennsylvania’s Secretary of Revenue Gregory Fajt reported on June 30 that the state’s General Fund collections in fiscal year 2004/05 totaled $24.3 billion which were $439.8 million above estimate. The proposed governor’s budget had already included $290.9 million of this projected surplus. Sales tax collections totaled $8 billion; personal income tax collections totaled $8.7 billion; and corporate taxes totaled $4.8 billion.

State Passes Budget
On July 7 the legislature passed the state budget for the 2005/O6 fiscal year (FY). PCPA’s Legislative Alert providing an overview of relevant budget items is available on the web site from the Legislative Affairs section.

A brief overview of the budget as it relates to mental retardation services shows:

  • ICF/MR state appropriations are $123,058,000 with a federal appropriation at $167,078,000;
  • Community Mental Retardation Services which include the Waiting List initiative and a 2 percent cost-of-living adjustment for direct care staff has a state appropriation of $729,623,000 with Medical Assistance funding of $701,193,000 and Social Services Block Grant (SSBG) funds of $13,984,000; and
  • Early Intervention services with a state appropriation of $89,535,000 and federal (including SSBG) of $2,195,000, Medical Assistance at $18,838,000, and Education for Children with Disabilities at $12,988,000.

For details access the budget legislation, House Bill 815 at www.legis.state.pa.us. Mental retardation budget items are on pages 129-131.

State Medicaid Restoration
Pennsylvania’s legislature and Governor Rendell closed budget negotiations and approved the restoration of $143 million originally cut from the state’s Medicaid budget. Items that were restored include:

  • Prescription coverage will continue for all recipients;
  • No limit on ambulance trips;
  • No limits on emergency room visits;
  • Hospital admissions for adults who receive Medicaid under Title XIX of Social Security Act will continue; and
  • No limits on durable medical equipment.

However there will be Medicaid cuts this year as follows:

  • Hospital admissions will be limited to one per year for patients on general assistance;
  • All patients will be limited to one rehabilitation service per year;
  • All patents will be limited to only 18 combined physician and/or outpatient visits per year;
  • Transportation will require a co-payment;
  • Families with disabled children whose incomes are over 200% of poverty will be required to pay a monthly premium; and
  • The Department of Public Welfare has been given authority to set co-pays.

MR Bulletin
The Office of Mental retardation has just released Mental Retardation Bulletin #00-05-03: Services Requiring Third Party Insurance Review Prior to Consideration for Waiver Payment. This bulletin clarifies that certain services require a written denial letter from the individual's physical or behavioral health care plan before these services can be considered a needed waiver service. Waiver funding cannot be used to supplant the cost of a service that is private insurance, Medicare, or Medicaid compensable. For a copy of the bulletin contact Linda Drummond.

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