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
Sens. Duhigg and Cervantes/
Rep. Thomson
LAST UPDATED
ORIGINAL DATE 2/28/2025
SHORT TITLE OBGYN Medicaid Reimbursements
BILL
NUMBER Senate Bill 370
ANALYST Rommel
APPROPRIATION*
(dollars in thousands)
FY25 FY26
Recurring or
Nonrecurring
Fund
Affected $0 12,000.0 Recurring General Fund
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
ESTIMATED ADDITIONAL OPERATING BUDGET IMPACT*
(dollars in thousands)
Agency/Program
FY25 FY26 FY27
3 Year
Total Cost
Recurring or
Nonrecurring
Fund
Affected
HCA $0 $12,000.0 12,000.0 $24.0 00.0 Recurring General Fund
HCA $0 $30,358.0 $30,358.0 $60,7 16.0 Recurring Federal Funds
Total $0 $42,358.0 $42,358. 0 $84,716.0 Recurring
Parentheses ( ) indicate expenditure decreases.
*Amounts reflect most recent analysis of this legislation.
Relates to House Bill 56
Sources of Information
LFC Files
Agency Analysis Received From
Health Care Authority (HCA) New Mexico Medical Board (NMMB) Department of Health (DOH)
SUMMARY
Synopsis of Choose an item.
Senate Bill 370 (SB370) appropriates $12 million from the general fund to the Health Care
Authority (HCA) for increased Medicaid reimbursements for obstetrics and gynecology
healthcare services.
Senate Bill 370 – Page 2
SB370 would increase the Medicaid reimbursement rate for obstetrics and gynecology healthcare
services to 250 percent of the Medicare reimbursement rate for equivalent services, using
Medicaid reimbursement rates for each obstetrics or gynecology healthcare service as of July 1,
2024, as a baseline for comparison. Obstetrics or gynecology healthcare services covered by
Medicaid, but not covered by Medicare, shall receive an increase in the Medicaid reimbursement
rate proportional to the average percentage increase in reimbursement that obstetrics or
gynecology healthcare services receive.
SB370 also includes provisions for all healthcare entities that receive increases in Medicaid
reimbursement to ensure that at least 75 percent of the increased reimbursement revenue is used
to provide increased compensation to healthcare workers and hire additional healthcare workers
who interact directly with patients.
This bill does not contain an effective date and, as a result, would go into effect 90 days after the
Legislature adjourns.
FISCAL IMPLICATIONS
The appropriation of $12 million 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.
HCA indicates it cannot presently calculate if $12 million from the general fund is sufficient to
provide an increase to 250 percent of Medicare for obstetrics or gynecology healthcare services.
For context, in FY25, the general fund cost to pay for increases in Medicaid reimbursement for
maternal, behavioral health, and primary care rates from 120 percent to 150 percent of Medicare
and to maintain other rates at 100 percent of Medicare is $100 million in general fund. The
potential additional cost of raising all rates to 200 percent of Medicare is a minimum $2.83
billion or $617 million from the general fund using a projected financial participation rate of
77.62 percent from FY26 and a medical cost inflation of 2.6 percent.
SIGNIFICANT ISSUES
HCA notes:
SB370 includes provisions for all healthcare entities that receive increases in Medicaid
reimbursement to ensure that at least 75 percent of the increased reimbursement revenue
is used to provide increased compensation to healthcare workers and hire additional
healthcare workers who interact directly with patients. HCA has implemented provider
attestations in the past. However, provider use of funds has not been auditable, thereby
making this portion of SB370 very difficult to enforce. SB370 aims to increase the
Medicaid reimbursement rate for direct obstetrics and gynecology healthcare services.
These services can vary between routine obstetric care (prenatal, delivery and postpartum
care), gynecological procedures (such as biopsies, insertion of intrauterine device,
colposcopies) and ultrasounds and imaging.
Senate Bill 370 – Page 3
ADMINISTRATIVE IMPLICATIONS
HCA notes OB-GYN services include routine evaluation and management clinical visits
distinguished only by diagnosis codes. Therefore, the bill would require significant claim
processing edits to assure compliance with the requirements. This bill would require a system
change in the financial services IT system. This change would be part of maintenance and
operations at no additional cost.
CONFLICT, DUPLICATION, COMPANIONSHIP, RELATIONSHIP
SB370 could relate to House Bill 56, which would ensure that Medicaid reimbursement for
services at birth centers is the same as reimbursement for services at hospitals.
OTHER SUBSTANT IVE ISSUES
New Mexico faces a shortage of obstetrics and gynecology physicians along with most other
primary care specialties. The 2024 New Mexico Healthcare Workforce Committee Report finds
that, with no redistribution of the current workforce, an additional 59 OB-GYNs would be
needed for all New Mexico counties to meet the national benchmark (2.2 per 10 thousand female
population. The Health Resources Service Agency (HRSA) projects a shortage around 70 OB-
GYNs through at least 2030, with a supply of 240 physicians to a need of 310 (77 percent
adequacy).
1
Increased reimbursement rates could attract more healthcare providers to offer obstetrics and
gynecology services to Medicaid patients, improving access to care.
The Department of Health notes SB370 may improve maternal health from the Medicaid because
reimbursement rates should provide additional access to care in urban areas, but this may not
reach the frontier and rural areas in New Mexico. Attracting and retaining healthcare providers in
rural communities can be challenging due to factors such as limited career opportunities, lower
reimbursement rates, and lack of infrastructure. Consequently, programs to deal broadly with
issues must first assess the abilities at each level—state, county and local—to overcome them.
HR/hg/sgs
1
https://digitalrepository.unm.edu/nmhc_workforce/13
https://data.hrsa.gov/topics/health-workforce/workforce-projections