Date Requested:February 07, 2014
Time Requested:01:48 PM
Agency: Health and Human Resources, Department of
CBD Number: Version: Bill Number: Resolution Number:
2014R1811 Introduced SB456
CBD Subject: EXPIRATION DATE FOR TAX RATE
FUND(S)
5090 -MEDICAID STATE SHARE FUND
Sources of Revenue
Special Fund
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 remove the expiration date for the tax rate on eligible acute care hospitals.
    The Department anticipates the fiscal impact of extending the expiration date (based on State Tax Department estimates) is $57,074,866 for SFY15 ($16,351,949 State share funded by provider tax) and for SFY16 is $19,392,495 ($5,555,950 State share funded by provider tax). See Explanation section below as well as State Tax Department fiscal note.
    

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2014
Increase/Decrease
(use"-")
2015
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 57,074,866 19,932,495
Personal Services 0 0 0
Current Expenses 0 57,074,866 19,932,495
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 0
3. Explanation of above estimates (including long-range effect):
    Previously the portion of the acute care hospital provider tax that funded the hospital upper payment limit payments was set to expire on 6/30/14. The payments for each quarter are made in the subsequent quarter, therefore the payment for the 6/30/14 hospital UPL is scheduled to be paid in July 2014 and was included in the budget forecast for SFY15. However, with the extension of the expiration of the provider tax there would be an additional three quarters' of payments paid during SFY15. The provider tax collection projections for these three quarters is $16,351,949, which would be paid in October 2014, January 2015 and April 2015. These collections, when matched at the federal rate of 71.35% provides program funding of $57,074,865.93.
    One remaining quarter of payments related to this extension period would be paid during SFY16 (in July 2015); the provider tax estimated to be collected for that quarter's payment is $5,555,949.70. When matched at a federal rate of 71.35%, the total funds provided is estimated at $19,392,495 for SFY16.
    The provider tax collections do not include any projection of impact (if any) from implementation of Affordable Care Act/expansion which will be in effect during the tax periods. Additionally, the calculations are based on a tax rate of .62% instead of the .61% in the legislation which is based on decline in projected revenue growth due to changes in reimbursement by other federal payers.
    


Memorandum
Person submitting Fiscal Note:
Karen L. Bowling
Email Address:
dhhrbudgetoffice@wv.gov