January 16, 2001

For more information contact:

Stanley S. Jones, Jr.

404-817-6133

          Greetings from under the Gold Dome!  While technically the Legislature is in recess, Members of its Appropriations Committee are extremely busy this week hearing budget proposals for FY2002 from the various agencies and departments.  The hearings process commenced today.  

          This process began with a lesson in economics.  Hank Thomassen, the Governor’s Economic Advisor, commented on the Governor’s revenue estimate for the fiscal year 2002, during a 45 minute address at the Joint Budget Hearings.  Thomassen explained that the Governor’s revenue estimate was a conservative one and wisely so.  Further, Mr. Thomassen outlined the reasons for a conservative revenue estimate to the Committee. 

Thomassen explained that Georgia’s economy basically follows the national trends.  Thus, the national economy has a large effect on Georgia’s economy, and the national economy is facing an imminent slow-down.  He stressed that we were not in a recession at present as there had not been a ‘spiral’ and there was as yet no significant duration or depth to this slow down.  There has been an increase of 4.4% in the national quarterly average growth rate during the last four years.  During this year’s third quarter, there was a mere annualized increase of 2.4%.  Thomassen feels it is a near certainty that fourth quarter returns for calendar year 2000 will be even lower than those of the disappointing third. 

He also noted the impact consumers play.  All reports show that consumer confidence is on a steady decline.  Moreover, the proportion of growth in manufacturing is the lowest it has been in the last fifteen years.  An increase in the growth in manufacturing has been cited in years prior by Alan Greenspan as one of the clearest indicators of economic boom.  The stock market has shown significant contractions, highlighted by a 40% drop in the NASDAQ since last March’s record highs.  This has resulted in rapidly shrinking business opportunity. 

Alan Greenspan’s decision to cut the federal funds reserve rate from 6.5% to 6% earlier this month is a clear indicator of an economic slow down.  Thomassen also noted that from an increase of between 8 and12% just one year ago, profits have decreased to between 3 and 4% this year.  This demonstrates a massive decrease in consumption during the past year. This could be counterbalanced by an increase in investment in private business, but this has not yet occurred.  In fact, national investments are down from an increase of between 8 and 10% last year to between 3 and 4% this year. 

Another factor in the emerging economic problems is an excessive reliance on hi-tech industries.  This year hi-tech companies were responsible for over 62% of domestic consumer consumption.  It is now becoming quite clear that there is a marked decrease in consumer demand for these products, evidenced by the financial troubles of such companies as Intel and Hewlett Packard.  With hi-tech companies accounting for an actual majority of national consumption, the economy will very much follow in its decline, as it has already begun to do.  

Due to the decrease in consumption, one can expect to see a rise in unemployment, especially in Georgia.  Georgia has the largest percentage of retail employment in the country, yet nowhere near the best sales numbers.  As these numbers get worse in the coming months, Georgia’s overstocked retail employment will undoubtedly take a major hit. 

Dr. Thomassen concluded by reassuring Georgians that while all signs point toward a statewide economic slow down, he does not foresee a recession.  In his opinion the Governor has planned a cautious budget in the face of a potential significant slow down.  Additionally, the Governor has set aside an additional $ 138 million for the Revenue Short Fall Reserve, bringing the total to over $ 550 million.  Thomassen also remarked that there is an 88% chance that the Governor’s revenue estimation will be surpassed. 

          There were some questions from the Floor: 

Senator Stokes, from the 43^rd District, asked how long an economic slow down must continue before it is deemed a recession?  Thomassen answered that a recession is defined as two consecutive quarters of negative returns.  Thus, it must be for at least six months, the length of two quarters. 

Representative Orrock asked for Dr. Thomassen to clarify what he meant when he said that the budget for the fiscal year 2003 will be even more restricted.  Thomassen explained that it is anticipated that FY2003 will not be as successful a year as FY2002 based on numbers projected for 2001..  Thus, the budget will be even more constrained.  Orrock followed up by asking that if the generally accepted guidelines for economic health in regard to unemployment is that benefits should be able to be paid for twelve months, and Georgia right now has the capacity to pay such benefits for two years: "Is it therefore secure?"  Mr. Thomassen conceded that one year is the generally accepted guideline.  However, in Georgia’s eight previous recessions, only two have lasted for one year or less. 

Additional Budget News 

          This afternoon, the Department of Human Resources’ Acting Commissioner, Gary Redding, made a presentation to the Committee.  He pointed out that there were two areas of the Governor’s Budget Recommendations for FY 2002 with which his Department was pleased.  Specifically, those recommendations were addressing the findings of the Governor’s Blue Ribbon Task Force (dealing with long-term care needs) and those addressing child advocacy needs (attempting to fix some of the problems with Georgia’s abused and neglected children).  Mr. Redding’s presentation and questions surpassed an hour and forty-five minutes: 

Some of the highlights: 

Computer systems for DHR with a total of $7,790,409 (this includes assisting with operating deficits in the current systems of $594,279; agency-wide technical support of $3,000,000; and operating costs associated with the Public Health frame relay system of $878,400 which were in the Amended FY2001 budget).  There would also be funds for operating costs for a new web-based system for the Office of Fraud and Abuse (this would have total funds of $25,699). 

Expansion of assistance to the elderly such as expanding the education on legal issues to elderly Georgians ($185,307); continuing the services by the Georgia Legal Senior Hotline (this grant has expired) for $150,000; and providing an additional 432 educational sessions to elderly Georgians throughout the State in the amount of $99,148.  There was also inclusion of funds for Adult Protective Services (APS) client emergencies ($200,000) and the addition of a position to coordinate services and resources for APS clients ($61,013). 

Contracting with Georgia Health Decisions to implement a statewide end-of-life decisions program for $250,000 

Updating the Success System to add a new class of assistance for TANF clients who have reached the 48-month Georgia Welfare Reform limit (this would have total funds of $258,413). 

Some of the Blue Ribbon Task Force suggestions included: 

-                     Providing home and community-based services to an additional 2,000 elderly clients who are not Medicaid eligible in the Aging Services Program ($4,000,000);

-                     Providing home and community-based services to an additional 2,000 elderly clients who are not eligible for the Community Care Services Program at a cost of $6,502,923;

-                     Funding a 4% rate increase for providers in the Community Care Services Program with funds of $1,294,597 (total funds of $3,187,092). 

There were also recommendations for increasing the federal Medicaid reimbursements: 

-                     Administration of services provided through Public Health ($2,300,000);

-                     Administration of services provided through local Public Health Clinics ($3,246,756);

-                     For children receiving services in out-of-home settings ($28,054,464);

-                     For targeted case management services for adults and children ($999,012). 

Children and pregnant women were also included:  Increases for funding for Babies Born Healthy to provide prenatal care, perinatal case management and pregnancy-related services for women who are poor but ineligible for Medicaid at a cost of $2,537,000.  There is also $958,864 for the enhancement of the Metabolic Newborn Screening Program by expanding the testing to 6 days per week.  There are funds of $5,000,000 to fund an additional 134 MATCH slots and an increase to MATCH providers by 4% at a cost of $1,736,847.  Another recommendation is to add 135 institutionally supervised family foster care placements at a cost of $225,917.  Increases to family foster care and adoption assistance to an age-based graduated rate for infants through age 18 is included at a cost of $5,297,877. There are also increases in the institutional foster care rates of 4%. 

Mental Health, mental retardation, and substance abuse were included: 

-                     Expansion of the outpatient substance abuse treatment to an additional 108 adolescent clients at a cost of $1,038,500;

-                     Funds for a pilot residential treatment program targeted to adolescents with mental retardation (found incompetent to stand trial or deemed inappropriate for the Juvenile Justice System) at a cost of $796,355;

-                     Funds for two programs for children in residential substance abuse treatment that teach those children academic and life skills at a cost of $100,000;

-                     Funds for a drug court substance abuse treatment program (based on the model in Glynn-Camden Counties) at a cost of $300,000;

-                     Funds for medical equipment at MH/MR/SA facilities serving clients with developmental disabilities and severe mental illness;

-                     Funds to improve safety and security of the MH/MR/SA maximum security forensic facility (at Central State Hospital) at $1,127,589. 

The recommendations also included the transfer of the State match for Mental Retardation Waiver services from the Department of Community Health to support DHR administration of Medicaid Waiver services in the amount of $51,246,606.  These recommendations also included the transfer of the State match for community health services from DCH to support DHR administration of Medicaid services in the amount of $37,138,648.  An inclusion of $144,000 in the recommendation was made to pilot a substance abuse treatment program targeting adult males (with a history of domestic abuse and are part of an active Child Support Services case).  Increases for providers of MH/MR/SA (Grant-In Aid) at 4% for a total of $3,862,609 is also included. 

There is an expansion of community-based services of an additional 1,232 clients on the community mental retardation planning list including funds for 366 Residential Care slots, 324 slots for Family Support Services, and 542 slots for Supported Employment/Day Habilitation.  This funding recommendation is $11,248,661. 

The Georgia Early Learning Initiative (GELI), which had $1.5 million funds starting in 2001, is proposed to get an additional $4,500,000.  There is also an inclusion of $4,300,000 for the provision of additional funding for the AIDS Drug Assistance Program (this would increase capacity by 455 client slots). 

Recommendations also include salary adjustments and new staff: 

-                     Provision of salary increases (effective Oct. 1, 2001) for DHR social services case managers and supervisors employed by the Division of Family and Children Services in the amount of $7,063,134;

-                     Addition of 6 positions to the Office of Financial Services (work on People Soft System and administrative requirements) and addition of a consultant to bid the Electronic Benefits Transfer contract at a cost of $432,690;

-                     Funding for 100 additional caseworkers in Child Protective Services (thus allowing caseload reductions) at a cost of $3,567,015;

-                     Funding to expand and improve training for Child Protective Services staff by funding 4 training positions, curriculum development and staff training/certification sessions at a cost of $845,098. 

In these recommendations, there was an inclusion of approximately $85 million to be gained through federal revenue maximization efforts.  Mr. Redding explained that this was an ongoing process and one that the federal government would have to approve.  He tried to assure the Committee that Commissioner Russ Toal (Department of Community Health) would speak more on this issue when he made his presentation to the Committee later in the week. 

          In the various questions raised, there were a number relating to the Welfare to Work initiative.  There have been 1,445 families which have reached their life-time limits of TANF assistance.  Of those who have reached the limits, there were 1,162 ‘hardship’ cases found.  Thus, those benefits have continued.  Rep. Orrock asked some pointed questions on the reduction of the numbers receiving assistance.  Redding explained that more than 51,000 families have been receiving TANF and out of these 23,792 were ‘child-only’ cases. 

Rep. Childers asked some questions relating to statistics on tobacco cessation programs.  Redding explained that the focus of DHR (through Public Health) had been on prevention.  Redding did agree to provide Rep. Childers more numbers concerning cessation/prevention efforts. 

Some of the Committee members raised concerns about HB 100, which established the Community Service Boards in an effort to get persons out of institutions and into community-based care.  Some members were concerned that not enough was being done to track complaints within this system and perhaps a revamping of HB 100 would be in order. 

          There were presentations made by a number of other Departments.  In the Student Finance Presentation made by Glenn Newsome, Executive Director, there was an inclusion in the recommendations for funds for student cancelable loans for those persons seeking to become nurses.  This is an effort by the State to help with the shortage of nursing staff around Georgia. 

          Tomorrow, there will be additional budget hearings.  Also, the House Insurance Committee will host Commissioner Russ Toal for a presentation on the status of the State Health Benefit Plan. 

Newly Introduced Legislation 

HB 156 – This bill authored by Rep. Larry Walker and others is proposed to amend O.C.G.A. §31-7-8 concerning disciplinary actions against persons authorized to practice medicine, osteopathy, podiatry, or dentistry in  Georgia.  This would repeal the confidentiality provisions concerning disciplinary actions against providers.  The bill also proposes to amend Title 43 concerning professions and business in order to repeal confidentiality provisions relating to investigations by the Composite State Board of Medical Examiners.  Finally, this legislation proposes to enact the “Patient Right to Know Act of 2001.”  Some of the specifics of this bill includes what the Composite State Board of Medical Examiners must collect to create physician profiles on each licensed physician (full name; names of medical schools attended and dates of attendance; location and dates of graduate medical education; specialty board certification; reciprocity of license if granted; number of years in practice and locations; current hospital privileges; location of primary practice setting; identification of any translating services available at the primary practice setting; participation in the Medicaid program; criminal convictions for felonies; felony charges where a plea of nolo contendere was entered; description of any disciplinary action by a regulatory board; description of revocation or restriction of hospital privileges; resignation from or non-renewal of medical staff membership; two or more prior judgments against or settlements with the physician relating to the practice of medicine; etc.)  A patient would have the right to receive a physician profile, upon request to the Board, by telephone, in writing, or by electronic mail, and the Board would have to respond within three business days by sending a copy of the profile to the person making the request.  Patients may also file a grievance with the Board when that patient has a complaint concerning a physician, his or her staff, office, or treatment received.  Such grievance would be filed with the Composite State Board of Medical Examiners.  This bill has been referred to the House Judiciary Committee. 

HB 158 – Rep. Connell and Rep. Buck have authored this amendment to the Hospital Authorities Law found at Article 4 of Chapter 7 of Title 31.  This would extend an exemption from the open records and open meeting law requirements to certain non-profit corporations operating certain medical facilities .  This bill has been forwarded to the House Ways and Means Committee. 

HB 169 – Rep. Channell and others have offered this amendment to O.C.G.A. § 33-24-59.5 concerning the timely payment of health benefits, notification of failure to pay, and penalty for violation.  This would expressly provide that the amount of such penalty shall not apply toward any cap on benefits payable.  This bill has been referred to the House Insurance Committee. 

HB 184 – Another motorcycle-headgear bill has been introduced.  Rep. Powell and others have offered an amendment to O.C.G.A. § 40-6-315 concerning the headgear and eye-protective devices in order to provide that a violation of this Code Section would not be a moving traffic violation.  This bill has been sent to the House Committee on Motor Vehicles. 

HB 186 – Rep. Powell and others have also introduced this bill amending Chapter 7 of Title 48 relating to income taxes so as to provide that the Georgia taxable net income of an individual taxpayer shall not include an amount equal to the amount expended by such taxpayer for premiums for health insurance for a qualifying family member.  This has been forwarded to House Insurance for study. 

HR 26 – Rep. Golick has introduced this with Reps. Lord, Shaw, Harbin and Bannister.  This proposes to establish the House Insurance Rate Regulation Study Committee.  This is an effort to “promote the public welfare by regulating insurance rates to the end that they shall not be excessive, inadequate, or unfairly discriminatory and to permit and encourage competition between insurers on a sound financial basis to the fullest extent possible.”  It has now been referred to the House Rules Committee. 

SB 30 – Sens. Ray, Kemp, and Tanksley have authored this amendment to Chapter 33 of Title 31 concerning health records.  This changes the provisions relating to the furnishing of copies of records and costs of copies.  This outlines a definition for “personal representative” which is “any person appointed as the administrator or executor of a decedent’s estate, any parent of a minor child, any person appointed as the guardian of the person or property of a patient, or any person appointed as an attorney-in-fact by the patient.”  The provider can request up to $.25 per page and a minimum fee of up to $20.00 (inclusive of copying charges).  If the provider requires payment of the costs prior to furnishing the records, the provider shall mail an invoice for costs of copying and mailing the patient’s records promptly upon receipt of the request and no later than 10 days following receipt of the request.  The provider shall also furnish the patient’s records within 30 days upon request or receipt of payment, whichever is less.