Section 9B. (1) In any fiscal year, the participation of the commonwealth in the demonstration project shall be contingent upon a finding of budget neutrality by the commissioner. Said budget neutrality finding shall be certified by establishing: (a) that MassHealth expenditures for expansion beneficiaries are within the amounts appropriated therefor and (b) that revenues credited and other amounts transferred to the Children’s and Seniors’ Health Care Assistance Fund are sufficient by themselves to meet expenditures for expansion beneficiaries in each fiscal year without requiring additional amounts to be appropriated or transferred from the General Fund or from any other fiscal resource of the commonwealth. Said finding shall be separate and apart from any budget neutrality tests required to maintain federal support for the demonstration project.
Said budget neutrality finding shall be based upon the information developed pursuant to subsection (2), as said information is updated pursuant to subsection (3) and as analyzed pursuant to the provisions of subsection (4). Reports containing such information shall be filed by the commissioner with the secretary of administration and finance and the house and senate committees on ways and means as directed by said subsections.
For purposes of this section, the division may establish a methodology for projecting estimates of caseload, expenditures and revenues, in order to distinguish between traditional and expansion beneficiaries, by using proxies and other conventions in order to account for changes in eligibility criteria implemented under the demonstration project that make it difficult to compare caseload, expenditures and revenue estimates under the demonstration project, provided that said methodology is explicitly stated by the division in any report required by this section.
(2) Not less than sixty days prior to the need for an appropriation to implement MassHealth, the division shall file a report that establishes projected base year expenditures for Medicaid and other programs of health care assistance as they were administered prior to the demonstration project and for which federal reimbursement is approved under the demonstration project. In establishing said base year expenditures, the division shall rely upon date-of-service expenditures for the most recently completed fiscal year. Said report shall further include the following information: (a) a five year expenditure projection, for each Medicaid category of assistance and each program of health care assistance that would have been incurred but for the implementation of the demonstration project; provided, however, that said projections are stated on a date-of-service basis and a date-of-payment basis for each state fiscal year for which said report is making projections, and provided, further, that said projections are based on the average rates of inflation and caseload growth in the base year and the preceding two fiscal years; (b) a five year projection of expenditures for each eligibility category qualified to enroll in the demonstration project as identified in subsection (2) of section nine A that shall explicitly distinguish expenditures on behalf of traditional beneficiaries from expenditures on behalf of each category of expansion beneficiary eligible to enroll in the demonstration project; (c) a five year projection of administrative costs that distinguishes one-time start-up costs from on-going costs and compares such costs to the costs that would have been incurred in the absence of the demonstration project; and (d) a five year projection of all revenues anticipated to be credited to the Children’s and Seniors’ Health Care Assistance Fund, including, but not limited to, tax revenues, premium contributions and federal reimbursements. Said report shall explicitly state all assumptions used in making such projections, including, but not limited to, caseload change, utilization rates, payment rates and any other factors that normally affect health care expenditures of the commonwealth. The expenditures stated in said report shall serve as the basis for advising the general court on the appropriations necessary to make MassHealth budget neutral, as defined herein, in each fiscal year and for conducting said annual budget neutrality test. The commissioner shall obtain the concurrence of the comptroller and the revenue commissioner with said revenue projections required by clause (d).
(3) Expenditure and revenue projections required by subsection (2) shall be updated semiannually based on actual expenditures and revenues of the demonstration project. Said updates shall be made available in sufficient time to advise the annual appropriations process for the operating budget of the commonwealth, provided that said updates shall be available no later than the first Wednesday in November for purposes of the governor’s budget recommendations pursuant to section seven H of chapter twenty-nine and by the first Wednesday in March for assisting the general court in making annual appropriations for the demonstration project. Said updates shall identify the reasons for any variations between any such expenditure and revenue projections and actual expenditures and revenues of the demonstration project and the risks, if any, that such variations pose to the budget neutrality of the demonstration project.
(4) The commissioner shall make the budget neutrality finding required by subsection (1) in a letter of certification that shall accompany the semi-annual update required by subsection (3). Said letter shall certify whether expenditures of the demonstration project for expansion beneficiaries exceed the amounts available therefor and whether revenues and appropriations credited to the Children’s and Seniors’ Health Care Assistance Fund are sufficient to fully support the costs of medical benefits for expansion beneficiaries in the current and subsequent fiscal year.
(5) In the event that said budget neutrality finding is unable to be certified pursuant to subsection (1), the commissioner shall notify the secretary that the commonwealth intends to withdraw from participation in the demonstration project within the time required by the Secretary, or ninety days, whichever is longer. Copies of said termination notice shall be submitted to the secretary of administration and finance and the house and senate committees on ways and means and the joint committee on health care. The commissioner may, prior to initiating said termination notice, file with said parties a plan of corrective action intended to produce budget neutrality within a specified time. Said plan may propose adjustments to any aspect of MassHealth, within the terms and conditions of the demonstration project, that the commissioner determines necessary to produce budget neutrality, including, but not limited to, the initiation of applicant waiting lists, eligibility limitations, changes to federal poverty levels, reductions in the amount, scope and duration of medical benefits, adjustments to or the imposition of beneficiary premium, copayment or other cost-sharing requirements, or revisions to provider billing deadlines, rates, payment schedules or other conditions of provider participation. If budget neutrality is not achieved within the time stipulated by the plan of corrective action, the commissioner shall notify said secretary and committees and initiate the termination notice to the secretary. In the event the commonwealth withdraws from participation in the demonstration project, beneficiaries may, subject to the availability of funds therefor, re-enroll in Medicaid or any program of health care assistance for which they would have qualified in the absence of a demonstration project.
(6) Notwithstanding the provisions of any general or special law to the contrary, the budget recommendations filed by the governor with the general court pursuant to section seven H of chapter twenty-nine shall recommend separate items of appropriation for the medical benefits to be provided to traditional beneficiaries and expansion beneficiaries in the next fiscal year. The revenue projections filed with said recommendations shall separately identify the federal reimbursements associated with traditional beneficiaries and expansion beneficiaries in the next fiscal year. Said budget recommendations shall separately identify the amounts projected to be expended for administrative expenses associated with the demonstration project.
(7) The annual appropriation act for each fiscal year shall make separate appropriations for the costs of medical benefits to be provided to traditional beneficiaries and expansion beneficiaries. Amounts appropriated for traditional beneficiaries shall be appropriated from the General Fund against which expenditures for said beneficiaries shall be charged. Amounts appropriated for expansion beneficiaries shall be charged to the General Fund only up to the amount that would otherwise have been appropriated for expansion beneficiaries in the absence of demonstration project as stated in the report required by clause (a) of subsection (2). Any remaining amounts necessary to meet the costs of medical benefits for expansion beneficiaries shall be appropriated from the Children’s and Seniors’ Health Care Assistance Fund.
(8) The division shall establish an allocation method to account separately for the costs of medical benefits incurred by traditional beneficiaries and by expansion beneficiaries. The division shall separately account for all revenues attributable to traditional beneficiaries and expansion beneficiaries, including, but not limited to, the federal reimbursements authorized under the demonstration project for expansion beneficiaries. The comptroller is hereby authorized and directed to establish in the state accounting system a means of identifying such separately identified expenditures and revenues.
(9) The comptroller is hereby authorized and directed to transfer amounts appropriated from the General Fund or any other fiscal resource of the commonwealth for expansion beneficiaries to the Children’s and Seniors’ Health Care Assistance Fund. Federal reimbursement generated by medical benefits provided to expansion beneficiaries shall be credited to said fund and shall be available for subsequent appropriation for said expansion beneficiaries. The comptroller is hereby further authorized and directed to notify the commissioner, the secretary of administration and finance and the house and senate committees on ways and means whenever the revenues and appropriations credited to said fund are projected to be insufficient to meet the actual and projected expenditures incurred on behalf of expansion beneficiaries in the fiscal year of the next fiscal year. The comptroller shall assist the commissioner in preparing the budget neutrality finding required by subsection (1).