FISCAL NOTE
Date Requested: January 26, 2024
Time Requested: 06:19 PM |
| Agency: |
Insurance Commission |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 3197 |
Introduced |
HB5241 |
|
|---|
| CBD Subject: |
Health; Insurance |
|---|
|
FUND(S):
7152 Insurance Commission Fund
Sources of Revenue:
Special Fund
Legislation creates:
Increases Existing Expenses
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
House Bill 5241, if enacted, would require the Insurance Commissioner to audit PEIA claims that are related to PTSD for first responders. The audits are to include the evaluation, diagnosis, and treatment of the PTSD claims. HB 5241would also require the Insurance Commissioner to provide annual reviews and reports to the Interim Joint Committee, Interim Committee on PEIA and Insurance, and the Interim Committee on VFDs and EMS. The OIC does not have the data to accurately estimate the number of first responders PTSD claims to be audited.
Please see the memorandum section of this fiscal note for additional information.
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):
Please explain increases and decreases in personal services, current expenses, repairs and alterations, assets, other costs and revenues, including assumptions and data sources and delineation between start-up and ongoing costs. Please also include a long-range schedule of costs and revenues if fiscal impact is expected to vary in future years.
Memorandum
The Public Employees Insurance Agency should be consulted regarding HB5241 and a fiscal note should be requested from PEIA.
It is anticipated that the Insurance Commissioner would need to contract with an outside firm to perform the audits, as we do not currently have internal capacity to absorb the additional duties required under HB 5241. Health Insurance Examiners bill hourly rates, which are included. Without knowing the scope of the number of claims within the PEIA system, we are unable to give an accurate estimate of the entire cost. The total price will vary greatly by the number of claims, but we have included rates for the typical types of examiners used in these reviews.
Role Proposed Rate per Hour
Examination Manager $165
EIC $155
Sr Examiner $140
Examiner $140
Parity Specialists $185
Data Specialists $170
HB 5241 does not specify if it would be acceptable for the Insurance Commissioner to utilize audit sampling methods to conduct the audits of the PEIA PTSD claims, or if all claims should be examined. If industry standard audit sampling methods are used, the price would be lower.
If the review / audit includes an assessment of the appropriate claims handling in accordance with medical necessity standards, it could take four hours to review an individual case (depending on if it includes utilization management/prior auth. denials, appeals, peer review, external review, etc.). In addition, there are some administrative support functions needed (management and data analysis) and specialists in case there are overall parity trends of concern. These estimates are based on Mental Health Parity reviews, as we believe that would be the closest current review standard to what is requested in HB 5241.
It should be noted that it is rare for the OIC or the insurance industry to undertake full audits geared toward a specific group of policyholders to the extent that appears to be required by HB 5241. Occupation is not a typical data collection field for health insurance, so while claims may be separated by group, it would likely be impossible to verify a clerical or executive position from an active responder. It may be less costly to include PEIA with existing mental health parity audits conducted on commercial carriers, as PTSD and substance abuse claims information would be captured during these exams on all PEIA members.
Since the submission of the original fiscal note, PEIA has confirmed that it cannot segregate its data to provide the OIC with certain diagnoses by occupation meaning that PEIA will not be able to provide data related to the diagnoses required to be supplied by HB5241 only for first responders. PEIA has confirmed that there were approximately ~3,000 patients or covered individuals under PEIA diagnosed with PTSD alone, dual diagnosis of PTSD and substance use disorder, or dual diagnosis of PTSD and suicidal ideation in 2023, which would likely account for thousands or tens of thousands of annual claims. However, it appears that it may be impossible to determine which of these individuals with the applicable diagnoses are first responders without manually reviewing each claim and/or contacting the covered individual to obtain occupation information. Auditing this many claims manually, would likely be very costly and would require the use of contracted examiners. The additional costs of hiring contracted examiners would be assessed to PEIA as, pursuant to WV Code 33-2-9, when making an examination, analysis or review, the Insurance Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants, professionals or other professionals and specialists as examiners, but the cost of retaining such examiners shall be borne by the company which is the subject of the examination, analysis or review.
Person submitting Fiscal Note: Rhonda C Hartwell
Email Address: rhonda.c.hartwell@wv.gov