Date Requested: February 24, 2015
Time Requested: 02:00 PM
Agency: Health Care Authority
CBD Number: Version: Bill Number: Resolution Number:
3201 Introduced HB2947
CBD Subject: Health


FUND(S):

5375

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 West Virginia Health Care Authority assesses each hospital annually that is subject to the provisions of this code section. This assessment is the main revenue source that supports the operations of this agency which includes personal services, current expenses, and grant programs, etc. Annual assessments are calculated to cover Fund 5375's annual appropriation. A decrease in the ability to assess up to this level will result in a decrease in expenditures for each fiscal year, accordingly.



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 0 0
Personal Services 0 0 0
Current Expenses 0 -1,268,530 -1,268,530
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -1,268,530 -1,268,530


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


    Based upon the interpretation of the proprosed legislation, the assessments for FY 2016 would decrease to $4,931,470 from $6,200,000 inf FY 2015 which is a $1,268,530 decrease in special revenue, annually. Therefore, expenditures of $1,268,530 wold likewise be cut to match the appropriation. The cut would impact two grant programs: 1) Hospital Assisstance Grants (Appropriation 02500) totalling $600,000 and the Rural Health System Program Grants (Appropriation 13000) totalling $668,530.



Memorandum


    There continues to be a technical defect with this legislation. This bill replaces "gross" revenue with "net" revenue. We have a concern that "Net" revenue is not an American Institute of Certified Public Accountants (AICPA) standard definition that is reflected in financial reporting and audits for health care organizations.
    
    This is similar to the technical defect in HB2652 in which the term "gross revenue" was replaced with "gross receipts" which is also not an AICPA definition that appears in health care reporting and audits.



    Person submitting Fiscal Note: Kristi Pritt, CFO
    Email Address: kpritt@hcawv.org