FISCAL NOTE



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 maximize federal funding for Medicaid by establishing a hospital Medicaid upper payment level program for a two year plus period. The bill increases the health care provider tax imposed on gross receipts of providers of certain eligible acute care hospitals. Imposition and collection of taxes under the bill is contingent upon federal approval of a state plan amendment establishing an appropriate hospital Medicaid upper payment level program that meets the requirements set forth in the bill. Imposition and collection of the taxes terminates prior to the end of the two year term of the program upon the occurrence of certain events. Due to the concerns indicated below, the Department is unable to provide an estimate of the fiscal impact in its current form. "The legislation appears to conflict with federal regulations in effect for healthcare provider taxes. 42 C.F.R. 433.57 states: Effective January 1, 1992, CMS will deduct from State’s expenditures for medical assistance, before calculating FFP, funds from provider-related donations and revenues generated by health care-related taxes received by a State or unit of local government, in accordance with the requirements, conditions, and limitations of this subpart, if the donations and taxes are not – (a) Permissible provider-related donations, as specified in §433.66(b); or (b) Health care-related taxes, as specified in §433.68(b). The tax in question appears to violate the hold-harmless provision of the regulations. Additionally, CFR 438.60 would prevent any additional payment for services covered under a capitation agreement."



Fiscal Note Detail


Effect of Proposal Fiscal Year
2011
Increase/Decrease
(use"-")
2012
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):






Memorandum


"§11-27-38(b) The language in the bill regarding ""maximizing federal funding for the state Medicaid program"" is of concern with respect to obtaining CMS approval of the state plan amendment required by the legislation. " §11-27-38(a) refers to a "Medicaid upper payment level program". The correct terminology is "Medicaid upper payment limit program". §11-27-38(b) (1) indicates "A state plan amendment is developed by the bureau of medical services". This should read the bureau for medical services. §11-27-38(b) (2) indicates "the state plan amendment is approved by the Medical Fund Services Advisory Council". This implies that the State Plan amendment is approved by the medical services advisory council. This council advises, not approves state plan amendments, so the statement is misleading. §11-27-38(b) - The state plan amendment shall include the following ...(3) ... as determined by the Secretary of Health and Human Resources. Is this meant to the US Department of Health and Human Services or the West Virginia Department of Health and Human Resources? " Technical flaw §11-27-38 (e) puts a retroactive effective date of January 1, 2011. The state plan can only be retroactively approved back to the first day of the quarter in which it is submitted. "



    Person submitting Fiscal Note: Michael J. Lewis, M.D., Ph.D.
    Email Address: dhhrbudgetoffice@wv.gov