Date Requested: January 28, 2015
Time Requested: 01:39 PM
Agency: Health and Human Resources, Department of
CBD Number: Version: Bill Number: Resolution Number:
2472 Introduced SB348
CBD Subject: Human Services


FUND(S):

0403 General Administration Fund

Sources of Revenue:

General Fund,Other Fund Federal

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 require the Secretary of the Department of Health and Human Resources to create a pilot program to provide drug screening of applicants for cash assistance.
    For this bill it is assumed the State has the fiscal responsibility of testing TANF applicants/recipients, (Cabell, Kanawha, Mercer) total estimated cost for the first year of this program would be $2,597,790 and subsequent years would be $1,848,562 if this pilot program is continued beyond the first year. The first time cost recognizes system upgrades, the background testing of all current and new participants, and drug testing 50% of current participants.
    



Fiscal Note Detail


Effect of Proposal Fiscal Year
2015
Increase/Decrease
(use"-")
2016
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 2,597,790 1,848,562
Personal Services 0 107,982 107,982
Current Expenses 0 2,489,808 1,740,580
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):


    Total estimated cost for the first year is $2,597,790 and subsequent years being $1,848,562. Recognizing first time costs of background testing all current participants, system upgrades, and drug testing for cause of 50% of participants.
    The Department's, Bureau for Children and Families (BCF) would be involved with the drug testing related to Temporary Assistance for Needy Families (TANF) program. Average number of families that received TANF was 3,066 for SFY 2014 (July 1, 2013 - June 30, 2014) as included in the LOCHHRA report. Cabell (819), Kanawha (1,395), and Mercer (852) counties were used for this estimate. For the purpose of the fiscal note the Department used the three counties with the highest number of TANF Cases (Kanawha, Cabell, and Mercer). For this bill it is assumed that 50% would be tested for cause. The current contract for drug testing is $56.50 per drug test so the cost estimate for testing of current participants would be $86,615 (1,533 participants x $56.50).
    The bill states if a person fails the initial test, they will be subject to a second test. Utilizing a fail rate of 17.34% of TANF recipients is based on illicit drug use data from the Results of the 2012- 2013 National Survey on Drug Use and Health: Summary of National Findings. Utilizing a fail rate of 17.34%, there is potential for an additional 266 (1,533 x .1734) tests. Therefore, the cost would be (266 x 56.50) = 15,029. If any portion of these individuals request retest from another facility, they are responsible for the cost of the additional drug screening unless a false positive is received.
    Assuming a fail rate of 17.34% per the publication, retest would be as follows: 1,533 participants x 17.34% = 266 retests x $56.50 = $15,029. The second fail rate assumes 266 participants x 17.34% = 46 retests x $56.50 = $2,599. Periodic drug screening of those that failed initially (and took the treatment) = 266 x $56.50 x 10 months (2 months have already passed due to first and second drug test and treatment) = $150,290.
    The proposed legislation does not clarify the fiscal responsibility of the drug treatment program that the participant is required to complete. The estimated costs for an Intensive Outpatient Program lasting 6 weeks (minimum of 30 days of treatment) is $4,500/person x 266 participants (initial fail rate) = $1,197,000. After completing the Outpatient Program, participants can retest, and if they get a positive drug screen, they are eligible to complete the treatment again for an estimated cost of $207,000 (46 participants from second fail rate above x $4,500.)
    The Department estimates that three Economic Service Workers would be needed to implement this pilot program, one in each County for a estimated cost of $107,982 (average salary and benefits of $35,994 x 3 FTE's).
    Estimated cost for 2016 related to required system changes to the Department's RAPIDS system (eligibility system) to accommodate requirements of the proposed legislation total is $640,845. This estimate is based on data from the Department's contractor for the RAPIDS system indicating an approximate 4,747 hours of programming time @ $135 = $640,845.
    Assuming the state would have the responsibility of proving the conviction validity of the participants. Based on the number of participants at the current state rate of $35.35 current cases (3,066 X $35.35) = $108,383 and new cases (2,321 X $35.35)= $82,047.
    



Memorandum


    The term reasonable suspicion creates an un-determined number, therefore 50% was selected as a base. This number could change substantially, therefore increasing or decreasing the actual expense incurred by the State .
    The proposed legislation does not clarify the fiscal responsibility of the drug treatment program that applicant/recipient is eligible to enroll in as to not be denied benefits. The estimated costs for an Intensive Outpatient Program lasting 6 weeks (minimum of 30 days of treatment) is $4,500/person. This cost is reflected in the fiscal note cost estimate.
    The proposed legislation could bring legal fees associated with the subjectivity of reasonable suspicion (i.e. discrimination). There is no way to quantify these fees.
    The West Virginia Medicaid Provider Manuals, Chapter 529 Laboratory Services, Section 529.4, specifically excludes routine drug screenings from covered services. It is not known whether the applicants for cash assistance would also be eligible for Medicaid; it would be necessary to separately identify those Medicaid members who apply for/receive cash assistance and participate in the pilot program to identify associated screening and/or treatment costs. This would require an additional attribute to member records for identification, within the Medicaid Management Information System, which would increase administrative costs. Medicaid currently covers drug treatment, however if individuals receiving cash assistance that are also Medicaid members elect to enroll in a drug treatment program, it would in turn increase Medicaid costs. Both of these situations could result in a fiscal impact to BMS; however, it is not possible to quantify any such impact at this time with the information available. Individuals that are terminated from cash assistance would not lose Medicaid eligibility.
    Twelve states have passed legislation regarding drug testing or screen for public assistance applicants or recipients (Alabama, Arizona, Florida, Georgia, Kansas, Michigan, Mississippi, Missouri, North Carolina, Oklahoma, Tennessee and Utah.) During the four months of Florida's mandatory drug testing program, only 2.6 percent of applicants (106 out of 4,086), failed the drug test, with an additional 40 people canceling their applications. December 2013, Florida's law was permanently stopped by a District Court judge ruling it violated constitutional protections against unreasonable searches. On December 2, 2014 the 11th US Circuit Court of Appeals upheld the ruling (LeBron v. Wilkins). In 2003, Michigan's drug testing program was struck down as a violation of the Fourth Amendment's protection against searches without reasonable cause (Marchwinski v. Howard).
    



    Person submitting Fiscal Note: Karen L. Bowling
    Email Address: karen.l.bowling@wv.gov