FISCAL NOTE
Date Requested: January 11, 2024
Time Requested: 02:45 PM |
| Agency: |
Tax & Revenue Department, WV State |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 2878 |
Introduced |
SB294 |
|
|---|
| CBD Subject: |
Taxation |
|---|
|
FUND(S):
Medicaid State Share Fund
Sources of Revenue:
Other Fund Medicaid State Share Fund
Legislation creates:
Increases Revenue From Existing Sources
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The stated purpose of this bill is to increase the tax rate imposed on certain hospitals up to the maximum amount allowed by the Centers for Medicare and Medicaid Services (CMS).
According to our interpretation, passage of this bill would allow for rate increases, as needed, to provide non-federal share funding up to the maximum amount allowed by the Centers for Medicare and Medicaid Services (CMS). The CMS allowable tax rate and maximum payment is to be calculated by the West Virginia Bureau for Medical Services (BMS) pursuant to CMS approved methodology. The Tax Commissioner, using the certified calculations from the BMS, shall publish the rates to be applicable by Administrative Notice 30 days prior to implementation. In addition, the legislation updates the language which defines those medical facilities which are subject to the tax as those which are not a “state-owned or designated facility”.
The current tax rate under W.Va. Code §11-27-38 is 0.0075 percent on the adjusted gross receipts received or receivable by eligible acute care hospitals that provide inpatient or outpatient hospital services in this state. Per our interpretation, the broadening of the base to potentially include critical access hospitals, licensed free standing psychiatric or medical rehabilitation hospitals, and licensed long-term care hospitals would increase Medicaid State Share collections by roughly $17 million per year at the current tax rate. There is insufficient information available to estimate the timing or amount of tax rate increases provided for in the legislation.
There would be no additional costs incurred by the State Tax Department.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2024
Increase/Decrease
(use"-") |
2025
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
According to our interpretation, passage of this bill would allow for rate increases, as needed, to provide non-federal share funding up to the maximum amount allowed by the Centers for Medicare and Medicaid Services (CMS). The CMS allowable tax rate and maximum payment is to be calculated by the West Virginia Bureau for Medical Services (BMS) pursuant to CMS approved methodology. The Tax Commissioner, using the certified calculations from the BMS, shall publish the rates to be applicable by Administrative Notice 30 days prior to implementation. In addition, the legislation updates the language which defines those medical facilities which are subject to the tax as those which are not a “state-owned or designated facility”.
The current tax rate under W.Va. Code §11-27-38 is 0.0075 percent on the adjusted gross receipts received or receivable by eligible acute care hospitals that provide inpatient or outpatient hospital services in this state. Per our interpretation, the broadening of the base to potentially include critical access hospitals, licensed free standing psychiatric or medical rehabilitation hospitals, and licensed long-term care hospitals would increase Medicaid State Share collections by roughly $17 million per year at the current tax rate. There is insufficient information available to estimate the timing or amount of tax rate increases provided for in the legislation.
There would be no additional costs incurred by the State Tax Department.
Memorandum
The stated purpose of this bill is to increase the tax rate imposed on certain hospitals up to the maximum amount allowed by the Centers for Medicare and Medicaid Services (CMS).
The bill purports to put in place a mechanism whereby the tax rate shall be increased, as needed, to provide non-federal share funding for practitioner payments as described in subsection (d) of §11-27-38, up to the maximum amount allowed by the Centers for Medicare and Medicaid Services (CMS).
Subsection (d) refers to the taxes collected under this section and deposited in the special revenue fund (Medicaid State Share Fund), specifically the “Eligible Acute Care Provider Enhancement Account.” Those funds are to be used to support West Virginia Medicaid and the directed payment program according to (federal) 42 C.F.R. 438.6.
The new language of subsection (b) of §11-27-38 appears to be copied and inserted from §11-27-39 but retains the language referring to “practitioner payments.” However, §11-27-38 does not otherwise address “practitioner payments.” The new subsection (b) refers to “subdivision (sic) (d)” but that appears to be a residual reference to subsection (d) of §11-27-39.
Removal of “acute care” and leaving “eligible hospital” without a definition or list of “eligible hospitals” is ambiguous. Neither is “designated facility” defined in relation to what is not an “eligible hospital”.
There is no internal effective date. The changes to the tax rate in this section enacted in the regular session of the Legislature in 2024 are to be effective upon approval by CMS of the state plan amendment.
Person submitting Fiscal Note: Mark Muchow
Email Address: kerri.r.petry@wv.gov