FISCAL NOTE
FUND(S):
0403 (Division of Human Services General Administrative Fund), 0407 (Central Office General Administrative Fund), 5172 ( Health Facility Licensing Fund), 8722 (Consolidated Federal Funds Division of Human Services General Administrative Fund
Sources of Revenue:
General Fund,Special Fund,Other Fund Federal
Legislation creates:
A New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to provide for a pilot project intended to divert low-income residents from early institutionalization in nursing homes by providing personal home care in their communities. The Department believes it will cost $37 per day per individual for personal care services to Medicaid eligible individuals residing in assisted living facilities. This assigned cost is based on the cost per day per individual receiving homemaker, transportation, case management, and nursing services under the Aged and Disabled Waiver program. Assuming that 100 people will be eligible to participate in the three demonstration cities of Williamson, Wheeling and Moundsville, the estimated annual cost for this program to be $1,350,500 including $352,616 in State funds. In order to implement this program, a waiver would have to be obtained from the Centers for Medicare and Medicaid Services (CMS) to secure federal financial participation for these services. The Department requested and was approved for a waiver in SFY2005. CMS has asked that this waiver be cancelled due to lack of activity.
In addition, the Department would also incur costs and revenue to the Department's Bureau for Public Health, Office of Health Facility Licensure and Certification (OHFLAC) relating to the licensing of these facilities. The figures are as follows:
In the first year, this bill requires an initial licensure survey for three new facilities (previously Moundsville was licensed, but the facility closed in September 2005 therefore they would need to be licensed again). Personal Service costs for surveyors at $2,968.50; Current Expense costs at $1,620; for a total cost of $4,588.50 to complete the initial surveys.
An initial inspection fee calculated by averaging the actual cost of performing an initial inspection on similar facility types preceding the new facility initial survey would be collected from each provider to cover the cost of the survey. The current average inspection fee collected is eight hundred seventy-eight ($878) dollars per facility, for a total revenue of $2,634 for the three new facilities.
No additional revenue is collected following the initial inspection.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2007
Increase/Decrease
(use"-") |
2008
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
1,355,089 |
1,350,500 |
| Personal Services |
0 |
2,969 |
0 |
| Current Expenses |
0 |
1,620 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
1,350,500 |
1,350,500 |
| 2. Estimated Total Revenues |
0 |
2,634 |
0 |
Explanation of above estimates (including long-range effect):
The following assumptions were made by the Department in determining the estimate used for provision of services: 1.) Service costs were estimated based on the 2006 daily cost for participants in the Aged and Disabled Waiver program of $37 per day; 2.) Members eligible for the pilot program were estimated to be 100; 3.) The cost to provide services to one member is estimated to be $13,505 annually; 4.) The Department would be successful in securing waiver approval from CMS; 5.) It is assumed that each participant would meet the nursing home placement level of care. 6.) Service limitations currently provided under the Aged and Disabled Waiver program are adequate to meet the needs of individuals participating in the pilot program since cost estimates were derived based on this program.
The following assumptions were made by the Department in determining the estimated cost of licensing three (3) facilities: Personal Services - 16 hours of Nurse Surveyor Time per facility x $18.70 (Average Nurse Surveyor Hourly Rate) x 2 Nurse Surveyors per facility = $598.40, 10 hours of Life Safety Time per facility x $17.25 (Average Life Safety Surveyor Hourly Rate) = $172.50, 4 hours of Travel Time per Surveyor per facility x $18.70 x 2 Surveyors = $149.60, 4 hours of Travel Time per Life Safety Surveyor per facility x $17.25 x 1 Surveyor = $69.00, Total per facility $989.50 x 3 Facilities = Total Personal Services of $2,968.50.
Current Expense - $30 Daily Meal Rate per Surveyor x 3 Surveyors x 2 Days per facility = $180, $60 Estimated lodging per night x 3 Surveyors x 2 Days per facility = $360, Total Travel per facility $540 x 3 facilities = Total Current Expense of $1,620
Total Personal Service $2,968.50 + Total Current Expense $1,620 = Total Expense $4,588.50.
Revenue for the first year consists of eight hundred seventy-eight (878) dollars per facility, the average cost of performing an inspection for the prior ten facilities, for a total revenue of $2,634 ($878 x 3 facilities).
Memorandum
The effect of this legislation would be to add an additional level of expense on the Medicaid program. While it would possibly be less expensive to cover services provided in a personal care home, Medicaid provides cost-based reimbursement to nursing facilities. To offset the additional expense, nursing home beds would need to be decertified. This legislation also duplicates, to some extent, services available through the current Aged and Disabled waiver.
Based on information provided by the Housing Authority of the City of Williamson in SFY2004, the reimbursement required from Medicaid is $28 per patient per day. Assuming a HUD subsidy allows them to provide these services for this price, the cost of this legislation would be $1,022,000, including $266,844 in state funds. At this time, we have not verified that the HUD information is still accurate.
Person submitting Fiscal Note: Martha Yeager Walker
Email Address: fnbudoff@wvdhhr.org