FISCAL NOTE

Date Requested: February 16, 2017
Time Requested: 01:37 PM
Agency: Health Care Authority, WV
CBD Number: Version: Bill Number: Resolution Number:
1405 Introduced HB2523
CBD Subject: Health


FUND(S):

5377 (formerly 5376)

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.


This legislation terminates the Certificate of Need (CON) program which is a division within the WV Health Care Authority. CON does the following: 1) protects the rural health safety net hospitals 2) promotes quality care and 3) controls cost borne by the consumer. CON is funded by Special Revenue (WV Code §16-2D-5) generated by an application fee for the filing of an application. These fees cover the personal services, benefits of (6) staff; and some expenses related to CON. The application fees will cease to exist and staff must be laid off if CON is eliminated. Since this is special revenue, the layoffs will NOT have a savings impact to the budget deficit since the positions are not funded with General Revenue. State General Revenue for State Payers such as PEIA and Medicaid would be significantly impacted. An actuarial report issued in 2009 by CCRC Actuaries, LLC. (the actuaries who have served the Public Employees Insurance Agency and the Children’s Health Insurance Program) stated that without CON, health care costs to the State of West Virginia would have increased by $21 million dollars from 2005 to 2008 through increases in PEIA, WVCHIP and the Medicaid State Share. In addition, private employers in West Virginia would have seen a $107 million increase in health care costs. The additional fiscal burden to individuals would have been $153 million. - CON controls healthcare cost which promotes business growth. The big three automakers conducted a study in 2002 and found health care costs are higher in states with no CON regulation. - CON keeps West Virginia patients in West Virginia creating revenue for West Virginia; jobs and tax revenue. - CON helps keep the jobs and tax revenue derived from the treatment of West Virginians in West Virginia. - CON prevents out of state providers from “cherry-picking” West Virginia patients. - CON ensures that health care resources are available to the uninsured and under-insured.



Fiscal Note Detail


Effect of Proposal Fiscal Year
2017
Increase/Decrease
(use"-")
2018
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 -444,067 0
Personal Services 0 -394,067 0
Current Expenses 0 -50,000 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -375,000 0


Explanation of above estimates (including long-range effect):


With an assumption that the program will end July 1, 2017 (FY 2018): 1. No impact in FY 2017. 2. FY 2018 the program would terminate and revenue and expenses end. 6 FTE's = $287,640 Benefits at 37% = $106,427 Office Expense (Including required legal notices) = $50,000 Total Expenses for FY 2018 = $444,067 Revenue from fees is based upon CON applications which vary from year to year, thus revenue will vary. Revenue is projected to be $375,000 in FY 2018. 3. FY 2019 – No revenue or expenses projected after FY 2018.



Memorandum






    Person submitting Fiscal Note: Kristi Pritt
    Email Address: kpritt@hcawv.org