Date Requested: May 24, 2017
Time Requested: 11:09 AM
Agency: Health and Human Resources, WV Department of
CBD Number: Version: Bill Number: Resolution Number:
4034 Introduced SB1012
CBD Subject:


FUND(S):

0403 - DIV OF HUMAN SERVICES GENERAL ADMINISTRATION FUND, 0525 - CONSOLIDATED MEDICAL SERVICES FUND, 5156 - HOSPITAL SERVICES REVENUE ACCOUNT

Sources of Revenue:

Special Fund

Legislation creates:

Decreases Existing Revenue, Decreases Existing Expenses, Creates New Fund:



Fiscal Note Summary


Effect this measure will have on costs and revenues of state government.


    The purpose of this bill is to require the selling of Jackie Withrow Hospital by the Secretary of the Department of Health and Human Resources.
    The bill establishes a fund called the "Jackie Withrow Long Term Care Facility Development Fund" to consist of appropriations to effectuate the sale of Jackie Withrow Hospital. The fund will consist of any revenue or sale proceeds.
    The Department estimates a positive fiscal impact relating to this bill. Due to the age of this facility (90 years old) and the size, structural repairs needed for the facility were estimated by an engineering firm in SFY2011 to require a new building rather than repair at a cost of $20M. These costs only rise each year due to insufficient funding to make needed repairs.
    The Department anticipates selling the beds from this facility to the private sector. As part of the sale, the entity would be required to build a replacement facility in the same general area, transfer the patients to the new facility and hire all of the staff. As a result of higher operational costs due to increased need for contracted employees, the Department estimates operational costs to be budget neutral in out years. The Department estimates significant state savings from avoidance of capital investment due to age of facility.



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 0 -10,625,482
Personal Services 0 0 -6,553,323
Current Expenses 0 0 -4,072,159
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 0 -8,333,435


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


    Based on SFY2016 data, Jackie Withrow had expenditures of $10,210,828 and revenue of $8,333,435 for a net loss of $1,877,393.
    Estimating paying a private entity approximately $243.26 per day (including cost for construction), Medicaid payments would total $8,127,824 (with $2,292,047 being state funding). This estimate is based on approximately 91 bed facility. This would net a state cost of $414,654 (2,292,047-1,877,393).
    The timeline has not yet been determined but it is not believed this can be accomplished prior to the end of SFY2018, therefore amounts reflected above are for future years.
    



Memorandum


    Please identify any areas of vagueness, technical defects, reasons a bill would not have a fiscal impact, and/or any special issues not captured elsewhere on this form.



    Person submitting Fiscal Note: Bill J. Crouch
    Email Address: dhhrbudgetoffice@wv.gov