Maximize Federal Funding for
Texas Department of Health Programs

The state should maximize opportunities to use federal funds in Texas Department of Health programs by claiming funds under the Chronically Ill and Disabled Children program and using Maternal and Child Health program funds for match.

The state s Chronically Ill and Disabled Children (CIDC) program, administered by the Department of Health, has been able to save some of its general revenue appropriations because more children are now eligible for the federally sponsored Early and Pe riodic Screening, Diagnosis and Treatment (EPSDT) program. Therefore, the cost of these children s medical bills can sometimes be paid by the EPSDT program.

A recent report by the Medicaid Analysis and Cost Control (MACC) Office in the Legislative Budget Office has identified several additional opportunities for savings in the way this program is funded. The MACC has stated that the Legislature could reduce the Department of Health s CIDC appropriation in an amount equal to the general revenue savings. 1~

The MACC found that about 64 percent of CIDC clients were Medicaid-eligible. Since EPSDT now covers more children, the Department of Health s Comprehensive Care Program (CCP) could save an additional $8 million in fiscal 1993 by obtaining reimbursement for those who are eligible for Medicaid. The agency also found that continuing issues concerning which agency pays for what clients is causing the state to lose about $3 million in general revenue because client bills are being paid out of general revenue, instead of federal Medicaid funds.

The MACC also looked at CIDC s case management clientele patients with multiple health problems requiring a coordinated approach to their individual circumstances. MACC found that of these clients, 56 percent were Medicaid-eligible children. Consequently, fed eral Medicaid funds again could be used to assist these clients and at the same time save $1.5 million in general revenue spending.

The MACC reported that the state s Maternal and Child Health (MCH) program could also use general revenue funds to match T itle V federal funds, thereby freeing up more general revenue to be used to match Medicaid reimbursements for the CIDC program.

Altogether, the MACC found that the Department of Health s appropriation for the CIDC program could be reduced by about $25 million for the biennium without reducing services.

In accordance with recommendation of the Medicaid Analysis and Cost Control Office, the Legislature should reduce the appropriation for the Department of Health s Chronically Ill and Disabl ed Children (CIDC) program by $22 million from the 1992-93 level of funding to account for savings from expanded Early and Periodic Screening, Diagnosis and Treatment (EPSDT), Comprehensive Care Program (CCP) and services to Medicaid-eligible clients and a n additional $3 million from the 1994-95 appropriation to offset general revenue budgeted for CIDC case management for a total of $25 million.

By taking advantage of expanded EPSDT and other opportunities, bringing additional Medicaid matchin g funds to Texas and using unmatched MCH state dollars to match Title V federal funds, the Department of Health could net additional federal dollars and expand services in the MCH program without costing additional general revenue.

Taxpayers would have the advantage of knowing that their state dollars are being maximized to obtain the most federal funds possible, while serving more people. Additionally, the state would save taxpayers $25 million in general revenue during the 1994-95 biennium without cutting services.

Fiscal Impact
The savings to general revenue would be $25 million for the biennium and $62.5 million for the five-year period.

Savings to the
Fiscal General Revenue Change in
Year Fund 001 FTEs

1994 $12,500,000 0
1995 12,500,000 0
1996 12,500,000 0
1997 12,500,000 0
1998 12,500,000 0

1 Legislative Budget Office, Medicaid Analysis and Cost Control Office, Medicaid Funding for Children s Health Services (Austin, Texas, December 1, 1992).