Fiscal impact reports (FIRs) are prepared by the Legislative Finance Committee (LFC) for standing finance
committees of the Legislature. LFC does not assume responsibility for the accuracy of these reports if they
are used for other purposes.
F I S C A L I M P A C T R E P O R T
SPONSOR Herndon
LAST UPDATED
ORIGINAL DATE 1
/21/2025
SHORT TITLE
Reimbursement for Vagus Nerve
Stimulation
BILL
NUMBER House Bill 53
ANALYST Hernandez
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected $370.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Sources of Information
LFC Files
Agency Analysis Received From HCA
SUMMARY
Synopsis of Choose an item.
House Bill 53 (HB53) appropriates $370 thousand from the general fund to the Health Care
Authority (HCA) for the purpose of reimbursing practitioners who provide vagus nerve
stimulation for New Mexicans who receive Medicaid.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns if enacted, or June 20, 2025.
FISCAL IMPLICATIONS
The appropriation of $370 thousand contained in this bill is a recurring expense to the general
fund. Any unexpended or unencumbered balance remaining at the end of FY26 shall revert to the
general fund. Changing the reimbursement rate for providers for one year creates an expectation
that the reimbursement will continue in future years, which makes this a recurring expense.
SIGNIFICANT ISSUES
According to HCA, the reimbursement rate for vagus nerve stimulation varies between 100
percent of the federal Medicaid fee schedule and 150 percent of the federal Medicare fee
schedule, depending on the procedure. Additionally, according to New Mexico Administrative
Code (NMAC) 8.310.3.11, the state will reimburse providers at the lower of the provider’s billed House Bill 53 – Page 2
charge or the relevant fee schedule. This means that providers, if they are not already reimbursed
at their billed charge, are reimbursed at a pre-set rate. HCA believes that, since HB53 neither
defines what it means by “fully reimburse” nor aligns with current Medicaid billing practice, the
authority needs clarification on what the additional amount of reimbursement should be in order
to implement HB 53.
Additionally, HCA notes that the Federal Medical Assistance Percentage (FMAP), which
dictates the percentage of Medicaid reimbursement covered by the federal government, is
calculated each federal fiscal year by the federal Department of Health and Human Services. For
FY26, the FMAP rate is 77.89 percent. However, if the FMAP rate was to significantly decrease
for FY27, then the state would be responsible for the difference, ultimately increasing state costs
for reimbursing vagus nerve stimulation in future years.
Vagus nerve stimulation is a medical treatment that uses electrical impulses to treat epilepsy,
depression, and symptoms caused by stroke. To provide vagus nerve stimulation, a surgeon must
implant a device into the neck and chest, which then sends impulses that travel through the vagus
nerve to the brain. This changes brain activity and alleviates symptoms associated with epilepsy,
depression, and stroke. A recent study in Neurology highlighted the effectiveness of vagus nerve
stimulation, identifying a 26 percent reduction in seizures for epileptic patients within the first
year of treatment.
ADMINISTRATIVE IMPLICATIONS
The Health Care Authority stated the following administrative implications:
Deviation for current reimbursement rates would require minor claims processing system
edits.
Deviation from current reimbursement methodologies described in NMAC 8.310.3.11
would require a Medicaid State Plan Amendment to address the change in payment
methodology, significant claims processing system edits, NMAC revisions, and managed
care Letters of Direction.
This bill will require a system change in the financial services information technology
system. This change will be part of maintenance and operations and will be made at no
additional cost. The specific requirements would need to be gathered before a timeline for
completion could be estimated.
TECHNICAL ISSUES
HB53’s language should be clarified to specify the additional increase to the reimbursement rate
meant by “fully reimburse” and to align the bill language with standard Medicaid reimbursement
practice.
AEH/rl/SL2