FISCAL NOTE
FUND(S):
Medicaid State Share Fund
Sources of Revenue:
Other Fund Medicaid State Share Fund
Legislation creates:
A New Program
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to provide a tax credit to medical providers in an amount equal to their investment in electronic medical record technology.
According to our interpretation, passage of this bill would result in a 100 percent tax credit for investment in electronic medical record technology to be applied against Health Care Provider Taxes. Since the Health Care Provider Tax on individual providers (e.g., doctors, dentists, etc.) under current law is to be phased out effective July 1, 2010, the proposed tax credit would only be available to hospitals, ambulatory surgical centers, providers of independent laboratory or X-ray services, intermediate care facilities for the mentally retarded, and nursing facilities. The State Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. However, the reduction in the Medicaid State Share Fund as a result of passage of this bill could be significant. There are no limits on the scope of the tax credit.
Unless alternative matching funds are secured, the reduction in the Medicaid State Share Fund will result in a reduction in Federal Funds of roughly three times the tax reduction.
Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $200,000.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2010
Increase/Decrease
(use"-") |
2011
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
200,000 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
200,000 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Passage of this bill would result in a 100 percent tax credit for investment in electronic medical record technology to be applied against Health Care Provider Taxes. Since the Health Care Provider Tax on individual providers (e.g., doctors, dentists, etc.) under current law is to be phased out effective July 1, 2010, the proposed tax credit would only be available to hospitals, ambulatory surgical centers, providers of independent laboratory or X-ray services, intermediate care facilities for the mentally retarded, and nursing facilities. The State Tax Department does not have access to the data necessary to calculate the revenue impact of this proposal. However, the reduction in the Medicaid State Share Fund as a result of passage of this bill could be significant. There are no limits on the scope of the tax credit.
Unless alternative matching funds are secured, the reduction in the Medicaid State Share Fund will result in a reduction in Federal Funds of roughly three times the tax reduction.
Additional administrative costs to the State Tax Department associated with passage of this bill would be roughly $200,000. The additional costs would be for programming to reconfigure the State Tax Department’s computer system.
Memorandum
The stated purpose of this bill is to provide a tax credit to medical providers in an amount equal to their investment in electronic medical record technology.
As written, the bill uses several terms (e.g., medical provider, investment, and electronic medical records technology) without providing a definition of their intended usage.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov