FISCAL NOTE
FUND(S):
0403 - Div of Human Services General Administrative Fund, 0525 - Consolidated Medical Services Fund, 8722 - Cons Federal Funds Div Human ServicesGen Admin Fd.
Sources of Revenue:
General Fund,Other Fund Federal
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The purpose of this bill is to provide a cost-of-living adjustment for comprehensive community mental health care providers.
The cost of living adjustment is based upon the rate of change in the medical component of the Consumer Price Index for All Consumers not to exceed a maximum rate of five percent. This increase will occur when the Department of Revenue estimates or projects personal income growth of two percent or more.
The Department of Health and Human Resources (Department) estimates the cost of this legislation to be $11,639,091 ($4,292,048 in state funds) per year for the Department's Bureau for Behavioral Health and Health Facilities and Bureau for Medical Services.
It is expected that these amounts will fluctuate each year based on changes in Consumer Price Index, utilization of behavioral health services and increases in Medicaid enrollment. It is currently projected that personal income growth will exceed the threshold of two percent through 2011.
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 |
11,639,091 |
11,639,091 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
1,693,167 |
1,693,167 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
9,945,924 |
9,945,924 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Per this bill, a cost-of-living increase will only occur in the years where personal income growth is projected to be at least two percent. According to income estimates presented in Volume 1 of the State of West Virginia FY 2008 Executive budget, real personal income is projected to increase 2.3% per annum/per year from 2006-2011.
The increase in CPI was derived from the 12 months percent change reported for 2006 by the U.S. Department of Labor, Bureau of Labor Statistics using the not seasonally adjusted Consumer Price Index - All Urban Consumers for Medical Care. Over the past ten years, the average change in CPI is approximately four percent per year ranging from a high of 4.7% in 2004 to a low of 2.8 % in 1997.
The current allocation to the comprehensive community mental health care providers is as follows: $35,836,322 (State) and $6,492,857 (Federal) which totals $42,329,179. Based on a four percent cost-of-living increase, this would cost the Bureau for Behavioral Health and Health Facilities an additional $1,693,167 per year ($42,329,179 * 4%). This is based on the assumption that the federal allocation would not increase to subsidize this bill and therefore, the state would have to increase its budget in order to maintain "current" funding levels for these programs.
Based on a four percent cost of living increase, this would cost the Bureau for Medical Services an additional $9,945,924 per year ($248,648,107 * 4%) . This amount was calculated using payments for all services rendered by facilities defined by WV Code ยง27-2A-1 (comprehensive behavioral health centers) which totaled $248,648,107. It should also be noted that all MRDD Waiver fees were increased in November 2006 at a projected cost of $24 M.
Memorandum
This bill states that "the department shall reimburse a comprehensive community behavioral health care provider for approved services rendered to an eligible individual", the services provided by BHHF are on a reimbursement of cost basis, and are not on specific eligible individuals.
This estimate is based only on costs for comprehensive behavioral health centers, if the bill was intended to include all behavioral health providers the cost would be significantly higher.
Person submitting Fiscal Note: Martha Yeager Walker
Email Address: fnbudoff@wvdhhr.org